17:58 | 2008-07-11
TEHRAN (FNA)- Oil jumped more than $1 to around $143 a barrel on Friday, extending the 4 percent gains in the past session, on heightened Israeli threats against Iran, geopolitical worries in Nigeria, and fears of supply disruption in Brazil.
US crude rose $1.18 to $142.83 a barrel by 3:33 a.m. EDT, after jumping $5.60 a barrel on Thursday.
London Brent crude was up $1.18 to $143.21 a barrel.
"There are continuing concerns over oil supplies over the short term," said Gerard Burg of National Australia Bank in Melbourne.
The market was worried about potential supply disruptions from OPEC nation exporters.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria's oil-producing region, said it was abandoning a ceasefire to protest a British offer to help tackle lawlessness in the region.
Rebel attacks on oil infrastructure in Nigeria, the world's No. 8 exporter, partly bolstered crude prices to record highs above $145 this month, adding to a nearly 50 percent rise in prices this year.
Fuelling prices further gained as OPEC-member Iran tested more missiles in the Persian Gulf on Thursday, in a move seen as a strong response to Israel's intensified threats.
Iran is the world's fourth-largest oil producer and OPEC's second-largest exporter. Oil traders fear any military conflict could prompt Iran to block the Strait of Hormuz, a passageway that handles about 40 percent of the world's tanker traffic.
Analysts view geopolitical factors as among the main causes of recent hike in prices, saying that fears of a new Middle East conflict are behind the new high for oil prices.
Market analysts, specially those from consumer nations, take Bush administration responsible for the price hikes in recent months, saying that it is the "rumors of US and Israeli action against Iran circulating in the markets" that affected oil and the dollar.
Workers at Brazil's Petrobras threatened to launch a five-day strike next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of daily oil output of around 1.8 million barrels.
Further support came from the weak dollar, which fell on Thursday, on renewed credit worries after capital concerns dragged down shares in major mortgage finance sources Fannie Mae and Freddie Mac.
However, the dollar edged up versus the yen on Friday, after a report the US government is considering taking over Fannie Mae and Freddie Mac if their condition worsened, providing some relief to investors and boosting stocks.
Investors have flocked to oil and other commodities this year as a hedge against rising inflation and the weak dollar.
But the International Energy Agency on Thursday forecast pressure on oil markets could ease next year as demand growth slows, cutting the need for crude from OPEC.
Qatar Oil Minister Abdullah al-Attiyah said he saw no demand for the additional crude that Saudi Arabia has pledged to pump. Saudi Arabia, the world's top exporter, has promised to step up production to its highest rate in three decades in an effort to tame oil prices.
The oil kingdom will supply full contracted volumes of crude in August to East Asia, steady to July, as refiners continued to shun extra barrels, sources with seven refiners said on Friday.
OPEC members have long maintained that factors beyond their control, such as speculation, a weakening US dollar and inadequate refining capacity are behind the drive in crude oil prices.
OPEC President Chakib Khelil has recently insisted that oil producers saw no need to raise supply, blaming high prices on factors such as US pressure on Iran over its nuclear program and the weak dollar.
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