Oil prices soar on supply fears By Paul Solman Published: August 15 2000 11:59GMT | Last Updated: August 15 2000 13:06GMT

Crude oil prices in London shot to their highest for 10 years on Tuesday, as the rally which began two weeks ago gathered momentum on continuing fears that supplies will be tight.

September Brent blend jumped through $32 a barrel in morning trading, and by 1130 GMT it had reached $32.80 a barrel, a gain of $1.32 on the day and the benchmark contract's highest level since 1990, when prices were bolstered by the Iraq's aggression towards Kuwait.

New York prices also rose in out of hours electronic trading. Both contracts closed up around $1 on Monday night, and have added more than $3 in the past week.

The weekly report on US inventories from the American Petroleum Institute is due for release late on Tuesday. The recent price strength has been largely a reaction to to the past two reports, which have showed a fall in stocks.

Oil market sentiment also received a boost on Monday by comments from Hugo Chavez, president of Venezuela, a leading member of the Organisation of Petroleum Exporting Countries, who expressed support for current price levels.

Opec will meet next month to discuss oil output policy, though members appear to have ruled out increasing production before then, in spite of rumours of action by Saudi Arabia.

Petroleum sector share on the London Stock Exchange also rose on Tuesday, with BP Amoco up over 2 per cent.

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-- Martin Thompson (mthom1927@aol.com), August 15, 2000