LONDON, March 28: World oil prices surged above $65 per barrel for the first time in two months on Tuesday, owing to supply concerns as a result of violence in Nigeria, Iran’s nuclear programme and falling inventories, traders said. New York’s main contract, light sweet crude for delivery in May, jumped $1.44 to $65.60 per barrel in pit trading. After a steady start to the day’s trading, it reached as high as $65.80, the highest point since February 6.
In London, the price of Brent North Sea crude for May delivery soared $1.35 to $64.96 per barrel in electronic deals. It hit a peak of $65.08, the highest level since February 2.
“Overall, we continue to favour upside risk in the oil market,” Barclays Capital analyst Kevin Norrish said. “We would expect the potential for further chaos in Nigeria.”
Nigeria, the biggest producer of crude oil in Africa, has seen output cut by more than 20 per cent as a result of attacks on oil installations in the delta.
Meanwhile, the US Department of Energy was due on Wednesday to publish its latest weekly report on energy stockpiles. Analysts in London are forecasting that US crude inventories rose by 1.8m barrels in the week ending March 24. However they predict stockpiles of gasoline (petrol) to have fallen.
Ahead of the so-called summer driving season beginning in May, when American drivers take to the roads on vacation, falls in US inventories of gasoline underpin oil prices.—AFP
