NEW YORK, 18 April 2006 — Oil prices broke new records above $71 a barrel yesterday owing to mounting tensions over Iran’s nuclear ambitions and rapid economic growth in China, dealers said.
Around 1600 GMT, Brent North Sea crude traded at $70.94 a barrel, up 37 cents from Thursday’s closing level in London, and off a new high reached earlier yesterday of $71.40.
New York’s main contract light, light sweet crude for May delivery, was up 58 cents from Thursday at $69.90 a barrel.
Prices had last set a record in New York of $70.85 on Aug. 30, after Hurricane Katrina hammered oil production facilities in the US Gulf of Mexico region.
Fimat analyst Mike Fitzpatrick said news that China’s economy grew at a blistering pace of 10.2 percent in the first quarter confirmed for many “that overall global energy demand is set to remain strong.”
Also, he said, a bomb attack in Israel which killed nine people next to a fast-food stand in Tel Aviv had fomented tensions in the Middle East.
Responsibility for the blast was claimed by the Palestinian group Islamic Jihad. Hamas, which recently formed a new Palestinian government, laid the blame at Israel’s door for its “aggression.”
“Now that Iran has pledged $50 million in support of Hamas ... (it) can’t help tensions in the region,” Fitzpatrick said.
Iran warned Washington on Sunday against attacking its nuclear facilities, saying it had tens of thousands of would-be bombers at the ready and could count on the support of militants across the region.
Alaron Trading analyst Phil Flynn said: “The oil market is taking the threat seriously as Iran may have gone down the path that leads to the point of no return.”