Oil prices rose further on Friday amid tensions over crude producer Iran and at the end of an extremely volatile week of trading.
Brent North Sea oil for August delivery jumped by $1,64 to $143,67 a barrel in electronic deals. New York’s main oil contract, light sweet crude for August delivery, won $1,80 to $143,45 dollars.
Oil prices had shot higher on Thursday, rising by almost $6 a barrel, on the back of simmering geopolitical tensions over key producer Iran and lingering worries over stretched global crude supplies, traders said.
On Monday, crude futures had dived below $140 a barrel on strengthening United States currency. A strong dollar makes dollar-priced crude more expensive for buyers using weaker currencies, dampening demand for oil.
Oil blazed a record-breaking trail last week, driven by geopolitical tensions over Iran, a weaker dollar and tightening global supplies, traders said.
On Friday, traders continued to track events concerning Iran, which is the Organisation of the Petroleum Exporting Countries’s (Opec) second-biggest crude oil producer with an output of about four million barrels per day.
Iran test-fired more missiles on Thursday, ignoring global concern over its launch of a broadside of missiles amid efforts to end a dispute over its nuclear programme.
The White House played down the risk of war between Iran and the US, despite the Iranian missile tests and some tough talk by US Secretary of State Condoleezza Rice.
Rice warned Iran that Washington had beefed up its security presence in the Gulf and would not hesitate to defend its ally Israel.
Iran insists its nuclear drive is aimed solely at generating energy, but some Western nations fear it could be aimed at making an atomic bomb and have called for a freeze of uranium enrichment.
Iran said on Friday that its top nuclear negotiator, Saeed Jalili, and European Union foreign policy chief Javier Salona would hold talks on ending the atomic stand-off on July 19 in Geneva, the official Irna news agency reported.
Opec would not be able to replace Iran’s oil production if supplies were halted in case of a war with Israel or the US, the oil cartel’s chief has said.
At the same time, however, the oil producers’ cartel has cut its estimate for world crude demand over the next two decades, predicting that high prices would compel consumer countries to be more efficient in their use of the precious commodity.
The International Energy Agency has meanwhile forecast that tension on oil markets is set to ease early next year amid an economic slowdown in the US.
The price of oil set a record high above $146 a barrel on July 3 owing to falling reserves of US crude, simmering tensions over Iran and a weak dollar, traders said.
Record oil prices have sparked protests worldwide as people struggle to cope with the ramped up costs of petrol, jet fuel, and domestic electricity and gas. — Sapa-AFP