LONDON, Aug 23: World crude prices rose on Monday on supply fears amid fighting in major producer Iraq and a report that Russian oil giant Yukos could face another crippling tax bill, traders said.
The price of benchmark Brent North Sea crude oil for delivery in October rose 17 cents to $43.71 per barrel in early afternoon trading here. New York's main contract, light sweet crude oil for delivery in October won 22 cents to $46.94 per barrel in pre-opening electronic trading.
The September contract expired on Friday, closing at $47.86, having reached an all-time high of $49.40 earlier in the day. "Intensifying violence in Iraq and signs of robust demand despite high prices have combined with thin global spare capacity to ensure most players are wary of calling an end to the rally that has added almost 48 per cent to the front Brent price since the start of the year," analysts at the Sucden brokerage firm said.
Prices rose on Monday even as oil exports from southern Iraq returned to around normal average levels. Exports from the region continued at a rate of 83,000 barrels per hour, an official of the South Oil Company told AFP.
Oil exports through the two pipelines at Basra and Khor al-Amaya returned to their normal average output of 85,000 barrels per hour late Saturday (about 1.9 million barrels a day), the official said on Sunday.
For 13 days, exports were down to between 36,000 and 42,000 barrels per day due to threats by Shia militia, loyal to their leader Moqtada Sadr, to blow up oil pipelines feeding the two southern terminals.
"But nevertheless, fighting is still continuing in Iraq and also there is a potential additional tax claim from the Russian government against Yukos ... All these things weigh on the market's mind and prices are up again. The market just believes that there could be further disruptions" to supply, he added.
Russian authorities are considering making a three-billion-dollar (2.44-billion-euro) tax claim from a key subsidiary of Yukos, the Russian oil giant already struggling under a massive tax bill, the Financial times reported on Monday.
The tax ministry was mulling the claim directly against the subsidiary Yuganskneftegaz, the newspaper reported a government official as saying. This would be in addition to an existing claim directly from Yukos for $3.4 billion and possibly billions more.
Yuganskneftegaz pumps 60 per cent of the oil in Yukos, Russia's largest oil producer, whose assets were frozen after it received the 3.4-billion-dollar tax bill for 2000. -AFP
