Thursday, July 10, 2008
LONDON (AFP) â€” Oil prices shot higher Thursday on the back of simmering geopolitical tensions about key producer Iran and lingering worries over stretched global crude supplies, traders said.
The International Energy Agency (IEA), meanwhile, forecast that tension on oil markets was set to ease early next year amid an economic slowdown in the United States.
In addition, the OPEC oil producers’ cartel cut its estimate for world crude demand over the next two decades, predicting that high prices would compel consumer countries to be more efficient in their use of the precious commodity.
New York’s main oil contract, light sweet crude for August delivery, was up 1.53 dollars to 137.58 dollars per barrel.
Brent North Sea oil for August added 1.09 dollars to 137.67 dollars.
“Investors were not ready to liquidate their crude positions just yet, with persistent geopolitical fears and worries over long-term crude supply tightness,” said Sucden analyst Andrey Kryuchenkov.
Prices have soared since breaking through 100 dollars at the start of the year but are down about 10 dollars from record peaks near 147 dollars last week.
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Traders tracked events concerning Iran, which is OPEC’s second-largest crude oil producer with an output of about 4.0 million barrels per day.
Iran test-fired more weaponry on Thursday as it continued war games, ignoring global concern over its launch of a broadside of missiles amid efforts to end the crisis over its nuclear programme.
The White House on Thursday downplayed the risk of war between Iran and the United States, despite the Iranian missile tests and some tough talk by US Secretary of State Condoleezza Rice.
Rice warned Iran on Thursday that Washington had beefed up its security presence in the Gulf and would not hesitate to defend Israel and other allies in the region.
Iran, which is a member of OPEC, insists its nuclear drive is aimed solely at generating energy but the West fears it could be aimed at making an atomic bomb and has called for a freeze of uranium enrichment.
This article was posted: Thursday, July 10, 2008 at 2:27 pm