Oil prices rose above $20 a barrel here Tuesday, December 4 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. — (AFP, London)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com )