Oil hits record above US$147 as fears intensify
Oil leapt US$5 to a new record high above US$147 a barrel on Friday, spurred by growing worries of threats to supplies from Iran and Nigeria and the possibility of a strike by Brazilian oil workers next week. U.S. crude was US$4.11 at US$145.76 a barrel by 1515 GMT, off highs of US$147.27, taking gains in just two sessions to over US$10. It rose US$5.60 or 4 percent a barrel on Thursday in a late burst of buying activity. London Brent crude was up US$3.77 at US$145.80 a barrel.
Leading the oil complex was ICE gas oil futures which climbed to a new record high of US$1,336.75 a ton amid strong demand for diesel and aviation fuel.
Analysts said the threat of supply disruptions provided the bullish backdrop, as the demand picture was unlikely to change much until after the Beijing Olympics. “We continue to believe that the downside risk to oil prices remains relatively low until the non-OECD countries begin to show greater price and income elasticity response than has been evident to date,” Deutsche Bank analyst Adam Sieminski said in a note.
Oil, which had been on the retreat for much of the week, reversed course on Thursday as fears resurfaced of supply disruptions from potential hot spots, OPEC members Iran and Nigeria. A spate of missile tests by Iran, the world’s fourth-largest oil exporter, in the last two days against a backdrop of rising tensions with Israel and the United States has left the oil markets worried.
Iran has threatened to strike back at Tel Aviv as well as U.S. interests in a key oil shipping route if it is attacked over its nuclear program, which Israel and the West fears is aimed at making nuclear weapons.
The United States says it is ready to defend its allies.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria’s oil-producing region, said it was abandoning a cease-fire to protest against a British offer to help tackle lawlessness in the region.
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