Crude oil leaps on revived geopolitical fears
Crude prices shot higher as concerns resurfaced over tensions in oil-producing nations Iran, Iraq and Nigeria, dealers said.india Updated: Jun 10, 2006 10:43 IST
Crude prices shot higher as concerns resurfaced over tensions in oil-producing nations Iran, Iraq and Nigeria, dealers said.
New York's main contract, light sweet crude for delivery in July, rose $1.28 to close at $71.63 per barrel.
In London, Brent North Sea crude for July delivery rallied $1.43 to $70.48 per barrel in closing deals on Friday.
The market reversed the losses from Thursday after news of the killing of Al-Qaeda's chief in Iraq, Abu Musab al-Zarqawi, as serious worries remained over the volatile situation there, analysts said.
"The end of Zarqawi will not be the end of threats to oil," said Mike Fitzpatrick, analyst at Fimat USA.
Yesterday, Iraqi oil sector employees came under assault as insurgents killed five people, including three oil engineers, security officials said.
"We still feel that the death of Al-Qaeda's leader will not provide a solution to a country that is not only fighting insurgents, but its own people," said Sucden analyst Sam Tilley.
Owing to persistent violence and sabotage, Iraq struggles to produce around 2.0 million barrels of oil per day, which is below the 2.5 million it produced before the US-led invasion of the country in March 2003.
"News that Iran has launched a fresh programme of uranium enrichment this week - just as the West has offered it incentives to stop - has also supported the market," Tilley added.