LONDON, 4 April 2006 — World oil prices leapt toward $68 per barrel yesterday as traders fretted over tensions in major crude producers Iran and Nigeria, and as investment funds flowed into the market, dealers said.
Iran yesterday test-fired what it described as a highly destructive torpedo in war games in the Gulf, warning the West not to “play with fire” at a time of mounting tensions over its nuclear program.
New York’s main contract, light sweet crude for delivery in May, surged by $1.02 to $67.65 per barrel in pit trading yesterday, after earlier hitting $67.90 - the best level since Feb. 1.
In London, the price of Brent North Sea crude for May delivery jumped $1.73 to $67.64 per barrel in electronic deals. The contract earlier struck $67.93 — the highest peak for seven months and near its record of $68.89, hit in August 2005.
Crude prices had increased by more than $2 last week on supply concerns in Iran and Nigeria and owing to falling stockpiles of US gasoline or petrol.
In Nigeria, Africa’s leading crude producer, output remains more than 20-percent lower than normal following recent attacks on oil facilities in the troubled Niger Delta region. “People are still watching political risks,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.