World oil prices rose on Friday on concerns over the possibility of further unrest in major producer Iraq despite a ceasefire in its holy city of Najaf, where fighting has raged for weeks, traders said.
The price of London’s benchmark Brent North Sea crude oil for delivery in October climbed 44 cents to $40,77 per barrel in early deals.
New York’s main contract, light sweet crude for October delivery, gained 43 cents to $43,53 per barrel in pre-opening electronic deals.
”Prices are bouncing again, a lot of people are saying that we’ve seen enough on the downside,” GNI-Man Financial trader Kevin Blemkin said.
”People are concerned and are not prepared to go short [of oil supplies] into the weekend”, especially since the London market will be shut on Monday because of a public holiday in Britain.
”Peace is supposed to be achieved [in Iraq with the ceasefire] and that could be an end to this uprising but with the Iraq situation, who knows what can happen next? There could be another problem with the pipelines,” Blemkin added.
In Iraq on Friday, militia loyal to rebel cleric Moqtada al-Sadr refused to hand in their heavy weapons to police after a ceasefire was struck and instead began hiding them around Najaf’s Old City and marketplace.
Al-Sadr agreed late on Thursday to a peace deal offered by Iraq’s Shi’ite spiritual leader Grand Ayatollah Ali al-Sistani to end weeks of bloody fighting in Najaf between United States troops and al-Sadr’s Mehdi Army.
Militia threats against oil infrastructure in Iraq that caused the country to halve its crude exports from the south, had pushed oil prices to record highs last week.
But prices ended lower on Thursday for the fifth straight trading day amid the ceasefire and as Iraqi crude exports have returned to normal levels of about 1,8-million barrels per day.
Prices remain far short of the all-time high of $49,40 reached in New York trading a week ago. — Sapa-AFP