Oil prices smash records; NY crude nears US$88

LONDON – World oil prices hurtled to fresh record highs yesterday, striking close to US$88 per barrel in New York amid fears over tensions between Turkey and Kurdish rebels in crude producer Iraq.

New York’s main futures contract, light sweet crude for delivery in November, surged to an historic US$87,97 per barrel in late morning deals. London’s Brent North Sea crude for November delivery soared to a fresh all-time high of US$84,31 per barrel.Prices also jumped on worries over stretched global energy supplies, particularly during the forthcoming northern hemisphere winter, when demand for heating fuel hits a peak.Traders were also spooked after the Organisation of the Petroleum Exporting Countries (Opec) on Monday cut its fourth-quarter non-Opec production outlook by 110 000 barrels per day.”The tensions in Turkey are the main driver here,” said Nas Nijjar, a trader at CMC Markets.”Now we have potential (supply) problems on top of that going into the winter.”Later Tuesday, London Brent pared gains to stand at US$83,81, up US$1,06 from Monday’s close.New York crude traded US$1,32 higher at US$87,45.Turkey had moved a step closer on Monday to a possible incursion into northern Iraq as the government sought parliament’s approval for military action against rebels of the separatist Kurdistan Workers’ Party (PKK).Many of Iraq’s largest oil fields are located in the north of the troubled country.The Iraqi government called Tuesday for urgent negotiations with Ankara.The call came in a conciliatory statement from Iraqi Prime Minister Nuri al-Maliki’s spokesman, Ali al-Dabbagh, in which he urged the Turks to adopt a diplomatic rather than a military way forward.”The market’s really trying to nail down here how much oil’s potentially affected by this,” said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.”There’s room for prices to move either way as the market gets on top of this.”According to Opec data, Iraq produced about two million barrels of crude per day in August.Before April 2003, the country pumped an estimated 2,8 million bpd.”Since the US-led invasion of Iraq in 2003 most of the country’s oil is shipped from the south of the country, while northern pipelines have been idle due to sabotage,” noted Sucden analyst Michael Davies.”Nevertheless, recently some proportion of exports was restored and oil was shipped irregularly to Turkish ports on Black Sea.”Added to the mix, the weak US currency makes dollar-priced commodities cheaper for buyers with stronger currencies, and therefore stokes demand for crude oil, analysts said.Nampa-AFPLondon’s Brent North Sea crude for November delivery soared to a fresh all-time high of US$84,31 per barrel.Prices also jumped on worries over stretched global energy supplies, particularly during the forthcoming northern hemisphere winter, when demand for heating fuel hits a peak.Traders were also spooked after the Organisation of the Petroleum Exporting Countries (Opec) on Monday cut its fourth-quarter non-Opec production outlook by 110 000 barrels per day.”The tensions in Turkey are the main driver here,” said Nas Nijjar, a trader at CMC Markets.”Now we have potential (supply) problems on top of that going into the winter.”Later Tuesday, London Brent pared gains to stand at US$83,81, up US$1,06 from Monday’s close.New York crude traded US$1,32 higher at US$87,45.Turkey had moved a step closer on Monday to a possible incursion into northern Iraq as the government sought parliament’s approval for military action against rebels of the separatist Kurdistan Workers’ Party (PKK).Many of Iraq’s largest oil fields are located in the north of the troubled country.The Iraqi government called Tuesday for urgent negotiations with Ankara.The call came in a conciliatory statement from Iraqi Prime Minister Nuri al-Maliki’s spokesman, Ali al-Dabbagh, in which he urged the Turks to adopt a diplomatic rather than a military way forward.”The market’s really trying to nail down here how much oil’s potentially affected by this,” said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.”There’s room for prices to move either way as the market gets on top of this.”According to Opec data, Iraq produced about two million barrels of crude per day in August.Before April 2003, the country pumped an estimated 2,8 million bpd.”Since the US-led invasion of Iraq in 2003 most of the country’s oil is shipped from the south of the country, while northern pipelines have been idle due to sabotage,” noted Sucden analyst Michael Davies.”Nevertheless, recently some proportion of exports was restored and oil was shipped irregularly to Turkish ports on Black Sea.”Added to the mix, the weak US currency makes dollar-priced commodities cheaper for buyers with stronger currencies, and therefore stokes demand for crude oil, analysts said.Nampa-AFP