LONDON, Dec 27: Oil prices headed towards the $100 per barrel mark on Thursday after the murder of PPP chairperson Benazir Bhutto and following a sixth successive weekly drop in US crude reserves.New York’s main contract, light sweet crude for February, leapt at one point during the day to $97.69 per barrel before falling back slightly.
In London, Brent North Sea crude for February delivery jumped to $95.42 per barrel.
Despite thin trade volumes due to the Christmas and year-end holiday, prices were edging ever closer towards recent record highs near $100 per barrel struck in November.
The market was already well supported by geopolitical jitters between Turkey and Iraq on Thursday, when news broke that Benazir Bhutto was assassinated in a suicide attack in Pakistan, a key ally in the US-led “war on terror.” The slaying stunned leaders around the world who urged calm and warned that extremists must not be allowed to destabilise the nuclear-armed nation before a parliamentary vote scheduled for early next month.
There are “rising geopolitical tensions in Pakistan ... and that is supportive for the crude market,” said AG Edwards analyst Eric Wittenauer.
Bhutto’s death “highlights the geopolitical tensions, because it’s not a major oil exporting region, but it is important in terms of geopolitical impact,” Wittenauer said.
MF Global trader Kevin Blemkin said that the news from Pakistan was an “unnerving situation.” Another factor pushing up the price of crude was the US Department of Energy data revealed Thursday showing that American crude reserves tumbled by 3.3 million barrels to 293.6 million barrels in the week ending December 21.
On Wednesday, oil prices had surged after Turkish air raids against Kurdish rebel hideouts in northern Iraq — which stoked supply concerns in the crude-rich Middle East region.
From a low point of just below $50 per barrel in January, prices doubled in 2007, hitting $99.29 a barrel on Nov 21, an all-time record, as traders reacted to tight global energy supplies amid tensions between Turkey and Iraq.
