Oil rockets to record highs in London and New York

Oil rockets to record highs in London and New York


Afternoon update

London: World oil prices surged to record peaks on Monday, hitting $84.35 per barrel in New York, as traders feared unrest in crude producer Iraq could further tighten global energy supplies.

London Brent oil, meanwhile, soared to a fresh all-time high of $81.26 per barrel.

Prices are surging amid heightened tensions between Turkey and Kurdish rebels in Iraq, traders said.

Turkish troops shelled an Iraqi border village overnight, continuing its bombardment of areas where Turkish Kurd rebels have set up bases, a frontier guard said on Monday.

The shelling came ahead of a meeting of the Turkish government in Ankara to prepare a motion seeking parliamentary approval for a military incursion into northern Iraq, where an estimated 3,500 rebels of the separatist Kurdistan Workers’ Party are based.

Oil market traders “are still worried about possible tension with Turkey and Iraq on the northern borders," explained Robert Montefusco, an analyst at Sucden brokerage in London.

“It’s being discussed in Turkish parliament at the moment over whether it is legal for them to go and invade.

He added: “There’s no lost production at the moment, so it’s only perceived that we could lose some production if any of the pipelines are affected in that region from Iraq."

“That is the main concern at the moment.

Monday’s historic peaks also came as solid US economic data signalled solid crude oil demand in a tightly-supplied market.

Traders are fearful of a peak in demand for heating fuel during the forthcoming northern hemisphere winter.


Singapore: Oil prices were steady Monday, 15 October, after closing at a new record in the previous session on worries that supplies are insufficient for coming winter demand amid reports of declining crude inventories.

Light, sweet crude for November delivery added 4 cents to $83.73 a barrel in Asian electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. The contract rose 61 cents to settle at a record $83.69 a barrel on Friday after rising as high as $84.05, also a record.

Brent crude futures fell 6 cents to $80.49 a barrel on the ICE futures exchange, London.

Recent reports have indicated that crude inventories are falling. Last week, the US Energy Department reported that US oil supplies declined in the week ended 5 October, while the International Energy Agency said that oil inventories held by the world’s largest industrialized countries have fallen below a five-year average.

Nymex heating oil futures rose 0.26 cent to $2.2490 a gallon (3.8 litres) while gasoline prices added 0.85 cent to $2.0936 a gallon. Natural gas futures rose 18.1 cents to $7.155 per 1,000 cubic feet.