Oil prices rise on Turkish air raids, supply concerns
New York, (AFP) - Oil prices rose sharply on Wednesday as
speculators' nerves were rattled by Turkish air raids against Kurdish
rebel hideouts in northern Iraq and lingering supply concerns.
Oil prices spiked after Turkish president Abdullah Gul praised the
United States for providing military intelligence as Ankara confirmed
its third air strike in 10 days against apparent Kurdish rebel bases.
New York's main oil futures contract, light sweet crude for February
delivery, closed up 1.84 dollars at 95.97 dollars a barrel following the
US markets break for the Christmas Day holiday on Tuesday.
In London, Brent North Sea crude for February delivery settled up
1.24 dollars at 93.94 dollars a barrel halfway through a
holiday-shortened trading week.
US-based traders said confirmation of fresh Turkish air strikes had
once again raised geopolitical angst, particularly as Iraq has some of
the world's largest oil reserves.
In earlier New York trading, prices had surged as high as 96.54
dollars. Prices struck a record high of 99.29 dollars on November 21.
Turkey's air raids on Wednesday were the third against the Kurdistan
Workers' Party (PKK) targets in northern Iraq that the military has
confirmed since December 16, in addition to a cross-border ground
operation.
"Further Turkish military efforts against the PKK rebels keeps the
geopolitical pot boiling in that oil flows from Iraq could potentially
be disrupted," said Mike Fitzpatrick, a market trader at Man Financial.
Ankara says an estimated 3,500 PKK militants have taken refuge in
northern Iraq, using camps there as a springboard for attacks across the
border.
Traders said fresh supply worries had also stoked prices higher.
"Poor weather closed two of Mexico's main export ports in the Gulf on
Monday, as well. Although they have reopened, the delays may impact US
oil supplies in the weeks ahead. Crude oil stocks are already near three
year lows," Fitzpatrick said.
Market participants said they were awaiting a weekly snapshot on US
energy stockpiles due to be released Thursday, a day later than normal
due to the Christmas holiday.
Last week's update from the US Department of Energy revealed that US
crude oil stocks had fallen below their five-year average for the first
time in more than three years.
Oil prices had also risen in earlier trading in Asia.
Asian traders said prices had got bid up on expectations of strong
heating fuel demand as cold weather continues to buffet the US midwest.
"What you are seeing is reasonably cold weather in the US which means
we will see demand for heating oil," said Jason Feer, Asia-Pacific
general manager for energy market analysts Argus Media in Singapore.
"The market sort of tends to view the cold weather as a bullish
factor," he said. |