The price of oil jumped here on Tuesday amid continuing concern that supplies could be affected by the violence in the Middle East and that demand could spike owing to colder weather in Europe and the United States.
The price of a barrel of North Sea Brent reference crude for November delivery jumped by more than 70 cents to 31.50 dollars before edging back to 31.31 dollars.
"The coming of the cold in certains areas of the US is the main factor behind the rise of Brent," said Prudential Bache analyst Tony Machacek. Some market watchers have predicted a 40-dollar barrel this winter if the weather is severe.
The International Energy Agency (IEA) said Tuesday that world demand for oil products would top 78.4 million barrels per day in the fourth quarter.
Earlier, analysts pointed to the violence in the Palestinian territories as a key factor affecting markets.
Analysts in particular noted warning noises from Saudi Arabia aimed at Israel, saying that if the crisis deepened and the Arab world rallied behind the Palestinians then oil supplies could be affected.
Saudi Crown Prince Abdullah bin Abdel Aziz warned Israel on Monday that the kingdom would rally to the Arab-Islamic cause if Israeli Prime Minister Ehud Barak made "the slightest intolerable step".
The GNI brokerage said the comment had "enhanced existing fears that the current crisis could escalate to the point that oil supplies were affected."
Fears over oil supplies sent oil prices spiking to 10-year highs in September, prompting concern that inflation and a global economic slowdown could ensue.Britain and Germany both blamed the soaring cost of oil for an inflationary surge in September. – (AFP)
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