Oil prices surge towards $30 on Mideast fears

Published June 12th, 2001 - 02:00 GMT

Oil prices welled up towards $30 a barrel on Monday, June 11, after a powerful Saudi Arabian prince warned that the Israeli-Palestinian conflict was threatening to spread to other regional states. 


The price of Brent North Sea crude for July delivery rose to $29.95 a barrel in London dealing, from $29.44 at the close on Friday. In New York a barrel of light sweet crude for July delivery gained 58 cents to $28.33, as floods in Texas raised a question over supply. 


But uppermost in dealers' mind were the words of caution from Saudi Arabian Crown Prince Abdallah Ben Abdel Aziz, who raised the spectre of the Israeli-Palestinian dispute drawing in neighbouring Arab oil-producing states. 


"We are all sitting on a powder keg, which could explode at any moment," he said in an interview with the Monday edition of the weekly Der Spiegel. "Such a war would not only affect Israel and the Arab states, but would be felt in many other parts of the world," he said. 


"The price of blood being spilt in the region is reaching a level we cannot tolerate much longer," the Saudi Arabian crown prince said. 


More than 600 people have been killed since a Palestinian uprising erupted last autumn. The outbreak of violence in September helped send oil prices to levels not seen since the 1990 Gulf War. 


Oil market analysts said that the comments were clearly directed at a foreign audience and should be taken as a warning that even moderate Arab nations would not sit on the fence indefinitely. 


"Clearly patience is running out in the Arab world and this comment re-established a link between Middle East tensions and the oil prices," said Lawrence Eagles, a commodities analyst with the GNI brokerage. — (AFP) 


© Agence France Presse 


© 2001 Mena Report (www.menareport.com)

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