Oil prices firmed here on Monday because an escalation of violence between Israel and Palestinians had increased concern that supplies of oil might be interrupted.
The benchmark Brent North Sea crude oil for November delivery was selling for 30.65 dollars a barrel, against 30.70 dollars at the opening and 30.10 dollars at the close on Friday. "The situation is out of control," said Salomon Smith Barney analyst Peter Gignoux. "There is a lot of nervousness on the market."
A drop in temperatures in parts of America has also rattled the market, with the propect of a spike in demand for heating oil looming large. "The cold weather has come in the Midwest and it is 15 to 20 degrees Fahrenheit (8.3 to 11.1 degrees Celsius) colder than normal," said Gignoux.
The new outbreak of violence in the Middle East has left more than 90 people dead in the Palestinian territories, Jerusalem and Arab areas of northern Israel in the past 11 days.]
Israeli Prime Minister Ehud Barak has issued an ultimatum to the Palestinians to end 11 days of bloodshed or risk killing the peace process.
Barak said on Sunday that Israeli defence forces would "act accordingly" if violence did not end within two days.
The GNI brokerage said on Monday that the real danger was that "the situation escalates to the point that Middle Eastern oil producers feel the need to become embroiled in the turmoil."
But GNI said that such an event "remains a distant possibility at this point." –(AFP)
© Agence France Presse 2000