Global Oil Prices Soar
Pastor Dale Morgan
*Global Oil Prices Soar*
From correspondents in New York
October 26, 2007 06:37am
Article from: Agence France-Presse
GLOBAL oil prices soared to bold new highs overnight amid US supply
concerns and geopolitical strains in the Middle East, including Turkey's
military threat in Iraq and fresh US sanctions on Iran.
New York's main futures contract, light sweet crude for delivery in
December, jumped by $US3.36 per barrel to close at a record $US90.46,
topping the prior record set on Saturday at 90.07.
Earlier the New York benchmark contract climbed to an all-time peak of
$US90.60.
In London, Brent North Sea crude for December delivery breached record
after record, surpassing $US86, then $US87, before settling up $US3.11
at 87.48. It reached a new high of $US87.59 in intraday trade.
"It's a combination of a lot of factors that have been pushing this
market so much higher," said Phil Flynn, an analyst at Alaron Trading.
"It's all happening at the same time: new concerns with Washington/Iran
and new concerns that OPEC isn't going to be able to increase production
to meet demand."
Oil prices bounded higher as Turkey threatened military action against
Kurdish rebels in the northern region of oil-rich Iraq.
Turkish President Abdullah Gul said his country was "running out of
patience" with Iraq over Kurd rebels there and would "purge" bases
across the border.
Mr Gul made the comments ahead of the arrival of an Iraqi delegation in
Ankara for talks on mounting tensions between the two countries.
Prices also found some support in Washington's announcement of new
sanctions against Iran for its alleged nuclear weapons drive and
terrorist financing. The sanctions targeted the Iranian military and
three of the largest state-owned banks.
"Generally speaking, the move was expected as the US has talked about
this possibility for weeks. It ended up not being a particularly strong
market mover, but it does seemingly escalate the tensions between the
two foes," said Eric Wittenauer, an energy analyst at AG Edwards.
A US government report yesterday that US energy stockpiles fell sharply
last week continued to drive buying. The Department of Energy said that
crude oil stockpiles had plunged by 5.3 million barrels in the week
ending October 19. The market had expected a gain of 960,000 barrels.
"Crude futures are still drawing support from yesterday's bullish report
on US crude inventories, as US commercial crude stocks remain around 5.0
percent below last year's estimates," said Sucden analyst Michael Davies.
Inventories of US distillates, which include diesel and heating fuel,
sank by 1.8 million barrels last week, confounding market expectations
of a rise of 275,000 barrels.
Heating fuel stocks are a key market focus because demand surges during
the northern hemisphere winter.
Oil prices "kicked up after the stats came in", Bache Commodities broker
Christopher Bellew said overnight.
"That sparked off another round of fund buying which has contributed to
the rapid rise we've seen."