Middle East crisis fuels continuing oil price rise

by JONATHAN PRYNN OIL prices marched higher today as rising tension in the Middle East, low reserves in industrialised nations and a cold snap in America sent Brent crude November futures up by more than 70 cents a barrel.

The price for November delivery surged 76 cents to $31.50 before retreating slightly to trade up 60 cents at $31.36 per barrel.

Despite assurances from Saudi Arabia, the world's largest producer, that it would not use its economic muscle to put pressure on Israel, concerns that oil output could be threatened by an escalation in Middle East hostilities remained in the market.

These worries were compounded by data from the International Energy Agency, which raised its demand forecasts for 2001.

The IEA said stockpiles in member countries of the Organisation for Economic Co-operation and Development fell by 400,000 barrels per day in August. OECD refineries were at near capacity and there were transport bottlenecks ahead of peak winter demand.

'Primary heating oil stocks in key consuming regions are extremely low and stocks in general need to be replenished before the arrival of winter if the Atlantic Basin is to avoid regional supply imbalances,' it said.

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-- Martin Thompson (mthom1927@aol.com), October 10, 2000