Australia: Oil Rises on Supply Concern as Middle East Tensions Escalate

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

10/08 21:47

Australia: Oil Rises on Supply Concern as Middle East Tensions Escalate

By Dudley White

Sydney, Oct. 9 (Bloomberg) -- Crude oil rose as much as 1.8 percent after fighting between Israelis and Palestinians raised concern that rising tensions in the Middle East may disrupt supplies at a time of low inventories and rising demand.

U.S. President Bill Clinton yesterday called on Syria to use its influence to help ease tensions after clashes between Israelis and Palestinians in the last 11 days left more than 80 people dead.

The violence spread on Saturday to Israel's border with Lebanon, raising concern about a clash between Israel and Arab oil producers, possibly disrupting supply at a time when U.S. heating oil inventories are half their year-ago levels just as cold weather boosts demand.

``It's looking pretty ugly at the moment,'' said Stuart Baker, an oil analyst at Macquarie Equities in Melbourne. ``It's happening at a time when you just don't want any disruption to supply.''

Crude oil for November delivery rose as much as 56 cents, or 1.8 percent, to $31.42 a barrel in electronic trading on the New York Mercantile Exchange.

Demonstrations against Israel broke out over the weekend in Syria, Jordan, Egypt and Kuwait, heightening concern that other Arab nations could become involved.

``If there's any hint of a disruption to supply then you'll see an impact on the oil price,'' said Mario Traviati, an oil and gas analyst at Merrill Lynch in Melbourne.

During a 30-minute telephone conversation, Clinton asked Syrian President Bashar Assad to help try to secure the release of three Israeli soldiers captured near the border with Lebanon by Islamic Hezbollah guerrillas, White House spokesman P.J. Crowley said yesterday.

Peace Talks Threat

Israeli Prime Minister Ehud Barak yesterday reiterated a threat to break off peace talks with the Palestinians if violent clashes between soldiers and protestors don't stop by Monday night. The United Nations Security Council Saturday approved a resolution condemning Israel's excessive use of force.

Concern about conflict in the Middle East comes at a time of growing concern that heating oil inventories aren't being filled quickly enough ahead of the Northern Hemisphere winter.

Government forecasters in the U.S., the world's biggest energy user, are projecting a 12 percent increase in demand from last winter, the warmest winter on record.

Higher crude oil prices and normal winter weather is likely to boost homeowners' heating oil bills by 25 percent this winter, the U.S. Energy Department said Friday. The report helped crude oil prices in New York to rise 1 percent during floor trading Friday, ending three straight declines.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOeEjzRWhT2lsIFJp

-- Carl Jenkins (Somewherepress@aol.com), October 08, 2000


Moderation questions? read the FAQ