LONDON, Dec 4: Oil prices rode above $20 a barrel here on Tuesday for the first time for almost three weeks as violence escalated in the Middle East.

The Brent North Sea crude January contract spiked briefly above $20 a barrel here, before ebbing to $19.91, up 20 cents from Monday evening.

In New York, light sweet crude January-dated futures climbed 65 cents a barrel overnight to $20.09.

Prices rose as Israeli F-16 warplanes and helicopters bombarded Palestinian targets in Gaza City in retaliation for recent suicide bomb attacks that left at least 25 Israelis dead and 210 others injured.

The flare-up of violence left traders nervous of a wider stand-off involving Arab oil-producing states, though they believed the possibility to be remote.

The market has not forgotten previous price spikes caused by stand-offs between Western crude importers and Arab exporters, as in 1973-4, 1990 and again last autumn.

Prices were also supported by signs that world crude producers might be approaching a deal to curb supply in line with falling demand.

The Organization of Petroleum Exporting Countries (Opec) has been frantically lobbying non members to join it in cutting output, but has met with resistance from major producers such as Russia.

But Opec Secretary General Ali Rodriguez said in Brussels on Monday that he was “very optimistic” that Opec and Russia could come to terms on production.

S. Arabia hikes crude prices: Saudi Arabia has raised US-bound crude prices for January by between 30 cents and $1 a barrel while lifting most European prices by 10-50 cents and most Asian prices by 5-15 cents, trading sources said on Tuesday.

The price for Arab Extra Light to Europe was cut by 25 cents, however, while that grade to Asia was left unchanged.

Meanwhile, the Organization of Oil Exporting Countries (Opec) still wants Russia to cut its oil production by some 180,000 barrels a day, Qatar’s Oil Minister Abdallah al-Attiyah said in an interview published Tuesday.

We are waiting for a Russian reduction of 180,000 barrels per day, al-Attiyah told the daily Vremya Novostei, adding that a cut of 100,000 would be rather insufficient.

Until now Russia has offered a cut of only 50,000 barrels a day, or 0.7 percent of its total production, over the last quarter of 2001.—AFP/Reuters