World oil traded near $97 a barrel in Asia on Friday, its highest level in a month, following the assassination of Pakistani opposition leader Benazir Bhutto, dealers said.
They said the rise in prices was also supported by a United States report showing a higher-than-expected drop in US crude stockpiles.
In afternoon trade, New York’s main contract, light sweet crude for February delivery, was 36 cents higher at $96,98 a barrel after closing 65 cents higher in New York.
Brent North Sea crude for February rose 45 cents to $95,23 a barrel after a jump of 84 cents in London trade on Thursday.
Trading volumes remained thin amid year-end holiday celebrations.
Crude futures had reached record highs near $100 per barrel in November and Tetsu Emori, a fund manager with Astmax asset management in Tokyo, said the Pakistani crisis and other factors gave renewed support to prices.
“Most of the factors are quite bullish,” he said.
Dealers said Bhutto’s killing on Thursday, which plunged the nation into crisis and sparked global condemnation and concern, would have a psychological impact on the market even though the country is not an oil producer.
There would be “very serious impact” as ramifications from the violence in Pakistan — a key US ally in the “war on terror” — play out, said Steve Rowles, an analyst with CFC Seymour securities in Hong Kong.
“It’s not so much what happens in Pakistan. It’s what happens in Afghanistan and everywhere else” in the region, Rowles said.
He added the crisis has brought geopolitical issues back to the forefront of market concerns.
There are “rising geopolitical tensions in Pakistan … and that is supportive for the crude market,” AG Edwards analyst Eric Wittenauer said during Thursday trading.
MF Global’s John Kilduff said that while oil flows would not be directly affected by the Bhutto killing, “it will suggest further destabilisation in an already unstable region”.
Bhutto (54), a two-time former prime minister and head of Pakistan’s most powerful political party, was shot in the neck by her attacker before he blew himself up at a political rally in Rawalpindi, killing about 20 people. — AFP