Oil prices jumped $5 to a record high above $147 a barrel on Friday amid growing worries of threats to supplies from Iran and Nigeria and a strike by Brazilian oil workers next week. The strong early gains were trimmed later in the day, however, as dealers focused on US economic turmoil that has already triggered a significant slowdown in oil consumption in the world's biggest energy user.
US crude rose $3.25 to $144.90 a barrel by 1827 GMT, after climbing as high as $147.27 earlier in the day. It rose $5.60 on Thursday in a late burst of buying activity. London Brent crude was up $2.41 at $144.44 a barrel.
"The market is just so sensitive today over Iran, Nigeria, Brazil," said a floor trader on the New York Mercantile Exchange, where US oil futures trade. "But you are also seeing a big slide on stock market prices and this is driving some fears to oil traders."
A spate of missile tests by Iran, the world's fourth-largest oil exporter, in the past 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 US interests in a key oil shipping route, if it is attacked over its nuclear program, which Israel and the West fear is aimed at making weapons.
Adding to geopolitical jitters, 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.
Rebel attacks on oil infrastructure in Nigeria, the world's eighth-biggest exporter, have been partly responsible for the nearly 50 percent rise in prices this year.
And workers at Brazil's Petrobras will launch a five-day strike next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of Brazil's daily output of around 1.8 million barrels, a union official said.
Oil prices have risen seven-fold since 2002 amid surging demand from China and other developing economies. Investors also have flocked to oil and other commodities recently as a hedge against rising inflation and a weak dollar.
Concern in the United States that Fannie Mae and Freddie Mac, the nation's largest mortgage financing providers, could run short of capital added to inflation worries by reducing the chances of an interest rate hike this year by the US Federal Reserve, some analysts said.
Oil prices have continued to rise despite efforts by top exporter Saudi Arabia to raise production to its highest rate in three decades in an effort to tame oil prices. Qatar Oil Minister Abdullah al-Attiyah told Reuters on Friday that he saw no demand for the additional crude that Saudi Arabia had pledged to pump.
Comments
Comments are closed.