×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Oil sprints towards $88, sets yet another record high

Oil sprints towards $88, sets yet another record high
Comment E-mail Print Share
First Published: Tue, Oct 16 2007. 03 36 PM IST
Updated: Tue, Oct 16 2007. 03 36 PM IST
Afternoon Update #2
London: Oil thundered towards $88 a barrel on Tuesday, 16 October, hitting a new record and extending a rally that has added $8 in as many days on tight supplies, strong demand and tension in northern Iraq.
Oil is closing in on the inflation-adjusted high of $90.46 seen in 1980, the year after the Iranian revolution and at the start of the Iran-Iraq war. Prices this year have averaged $67.
At 0850 GMT US crude was up $1.42 at $87.55, off a high of $87.97. London Brent was up $1.15 at $83.90.
Oil has set a series of records over the past three days.
Investors have cited rising tensions between Turkey and Kurdish separatists in northern Iraq, sturdy world energy demand growth, tight inventories in consumer nations heading into winter and unprecedented weakness in the US dollar.
The latest flurry of buying extends the market’s rise from below $70 in mid-August, a rally fuelled by the record lows in the US dollar, sturdy world energy demand growth and tight consumer nation inventories heading into the winter.
Afternoon update
Singapore: Crude oil prices surged to fresh records above $86 a barrel in Asia on Tuesday, 16 October, amid fears of supply disruption due to rising tension between Turkey and Kurdish rebels in neighbouring Iraq.
In afternoon trade New York’s main oil futures contract, light sweet crude for delivery in November, was trading at $86.75 a barrel, 62 cents higher than in late New York trades on Monday.
Brent North Sea crude also hit a record, spiking above $83 for the time. The contract for November delivery was 51 cents higher at a fresh record of $83.26, after jumping $2.20 to $82.75 in London on Monday.
Brent’s previous record of $81.05 was hit late last month, while New York crude has now surpassed its former all-time peak of $84.10 reached during intra-day trade in September.
Turkey moved a step closer Monday to a possible incursion into northern Iraq as the government sought parliament’s approval for military action against Kurdish rebel bases, despite US opposition.
The army said at the weekend that it had shelled Iraqi territory after PKK rebels attacked a Turkish military outpost with rockets and gunfire from across the border.
“The market’s really trying to nail down here how much oil’s potentially affected by this,” said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.
“There’s room for prices to move either way as the market gets on top of this.”
Many of Iraq’s largest oil fields are located in the north of the country.
Morning
Singapore: Oil held firm above $86 a barrel on Tuesday, 16 October, after soaring nearly 3% to a record high, extending its recent rally to a sixth day amid tension between Turkey and Iraq plus anxiety over winter supplies.
US crude rose 12 cents to $86.25 a barrel at 0207 GMT after closing $2.44 higher on Monday, when the market hit a new all-time peak of $86.71 a barrel in after-hours electronic trade, more than $2.50 higher than Friday’s previous record.
London Brent crude closed $2.20 higher at $82.75.
The latest flurry of buying extends the market’s rise from below $70 in mid-August, a rally fuelled by the record lows in the US dollar, sturdy world energy demand growth and tight consumer nation inventories heading into the winter.
A possible Turkish military attack against Kurdish separatists in Iraq has more recently spurred buying as dealers fear a possible disruption to regional oil exports.
The Turkish cabinet asked parliament on Monday for permission to launch the attack. Iraqi oil exports via Turkey have been sporadic since 2003, although Turkey is also now a major conduit for Caspian oil exports to the Mediterranean.
Oil’s nearly $8 or 10% surge in just over a week has also been aided by additional fund buying across the commodities complex, partly as a hedge against a weaker dollar. Gold hit a 28-year high and platinum breached record levels.
Comment E-mail Print Share
First Published: Tue, Oct 16 2007. 03 36 PM IST
More Topics: Oil | Brent | US crude | Turkey | Iraq |