World oil prices surge after Iraqi pipeline blast

Wext: Monday, 06.September. @ 00:00:00 CEST


02. 09. 2004 LONDON (AFP) - World oil prices soared after a pipeline explosion in Iraqfuelled fears about disruptions to supplies, traders said.

Prices had already been rising fast prior to news of the explosion due to the possibility of a production shut-down by Russian oil giant Yukos and as a hurricane headed towards the United States, threatening transportation of supplies there, they added.

The price of benchmark Brent North Sea crude oil for delivery in October jumped 1.11 dollars to 42.58 dollars per barrel in late afternoon trading in London.

New York's reference light sweet crude for October delivery gained 95 cents to 44.95 dollars in early deals.

An Iraqi oil official told AFP that the strategic northern Iraqi oil pipeline from Kirkuk to the Turkish Mediterranean port of Ceyhan was ablaze after a huge explosion, seriously affecting oil exports.

"We have received news of a huge explosion, seriously affecting the pumping of oil," said Northern Oil Company engineer Aidin Abdullah.

A bomb exploded at 6:30 pm (1430 GMT) on a road next to the pipeline by the town of Riyadh 50 kilometres (about 30 miles) south of Kirkuk, said Major General Anwar Hamid Amin, the head of the Kirkuk national guard.

Prices had risen earlier in the day on news concerning Yukos and Hurricane Frances.

"It seems that jitters about Yukos have caused the surge," said one trader in London before news of the blast in Iraq.

A Moscow court had Tuesday granted a state prosecutor's request "to seize all resources in accounts belonging to the main producing divisions of the Yukos oil company", the company said in a statement.

"Fuel delivery in more than 40 regions of the Russian Federation will be threatened," it added, without providing details.

Meanwhile, Hurricane Frances lashed the Turks and Caicos and the Bahamas as it barreled toward Florida, where authorities have declared a state of emergency.

Source: AFP

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