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Monday, January 05, 2009
Oil rises above $47 on Middle East tension (2:55 p.m.)
SINGAPORE -- Oil prices rose to above $47 a barrel Monday in Asia as a ground offensive by Israeli troops against Hamas militants in Gaza heightened tensions in the oil-rich Middle East.
Light, sweet crude for February delivery rose 83 cents to $47.17 a barrel, after earlier jumping to as high as $48.66, in electronic trading on the New York Mercantile Exchange by midday in Singapore.
The contract rose Friday $1.74 to settle at $46.34.
Thousands of Israeli troops backed by tanks and helicopter gunships surrounded Gaza's largest city and fought Hamas militants at close range Sunday, as the offensive moved from airstrikes to artillery shelling and ground fighting in a bid to stop rocket fire on southern Israel.
"With Israeli troops going into Gaza, that just heightens fears of the possibility of a wider Middle East conflict," said Ken Hasegawa, an energy analyst with broker Newedge in Tokyo. "Prices will likely continue to rise in the short term."
Investors are also keeping close tabs on whether OPEC is following through on announced production cuts. The Organization of Petroleum Exporting Countries has pledged to reduce output quotas by 4 million barrels a day since October.
"The direction of oil going forward will depend on OPEC's compliance with their output cuts and the health of the global economy," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. Shum expects prices to average in the low $50s this year.
An attack on an oil pipeline in Nigeria's restive south also helped bolster prices. Regional army chief Brig. Gen. Wuyep Rimtip said Saturday he did not know how severely the pipeline was damaged and suspected local youths rather than militants were responsible for the attack.
In other Nymex trading, gasoline futures rose 2.50 cents to $1.14 a gallon. Heating oil gained 0.37 cent to $1.48 a gallon while natural gas for February delivery jumped 2.9 cents to $6.00 per 1,000 cubic feet.
In London, February Brent crude rose 57 cents to $47.48 a barrel on the ICE Futures exchange. (AP) |
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