The price of oil spiked upwards again towards 32 dollars a barrel on Thursday following a report that Iraq could soon halt crude deliveries because of a dispute over currency payments with the United Nations, analysts and dealers said.
A barrel of Brent North Sea benchmark crude for December delivery advanced 47 cents to 31.85 dollars a barrel, before easing slightly.
Prices had fallen on Wednesday, with Brent closing at 31.38 dollars while in New York a barrel of light sweet crude slipped to 32.96 dollars.
But on Thursday, the market found its feet again as investors digested a report in the Middle East Economic Survey (MEES) that Iraq could halt oil sales.
"There is a serious possibility that Iraqi oil exports could be suspended next week as a result of the delay at the UN in deciding whether to approve Baghdad's instructions to its customers to pay for Iraqi oil in Euros as of November 1," the MEES article said.
"The move into the Euro has a high priority on the Iraqi political agenda and it is unclear how Baghdad might react to the delay," it said, adding that the market was uncertain whether Iraq would dig in and "refuse to export oil unless Euro-denominated letters of credit are opened by November 1."
Iraq exports more than two million barrels of oil a day, an important volume given the extremely tight situation on the oil market at the moment, which is short on reserves as winter approaches.
Fears that supply will not be able to satisfy demand this winter caused prices to spike to 10-year high points above 35 dollars in recent weeks – LONDON (AFP)
© 2000 Al Bawaba (www.albawaba.com)
