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Oil prices rise on Middle East tensions

/ 11:15 AM November 18, 2012

NEW YORK — Oil prices rose Friday on concerns about supply in the wake of the latest burst of violence in the Middle East.

The price of a barrel of light, sweet crude oil for delivery in December rose $1.22 to $86.67 a barrel on the New York Mercantile Exchange.

In London, Brent futures, trading in the first day of the January contract, closed at $108.95 a barrel, up 94 cents on the Intercontinental Exchange.


Friday’s jump in oil prices reversed Thursday’s trading, which saw oil prices retreat due to uncertainty about global economic growth.

Given the tense situation in the Middle East, traders did not want to be caught before the weekend without sufficient orders for more oil in case the situation worsens, said John Kilduff, a trader at Again Capital.

On Friday, the Israeli army continued its aerial raids on Gaza and blocked major roadways to the Palestinian territory.

In the latest move, Palestinian combattants at Gaza aimed rockets in the direction of Jerusalem and Tel Aviv, pushing the Israelis to mobilize reservists and warn of an eventual ground offensive against the Palestinians.

The bloodshed began on Wednesday when Israel killed top Hamas military chief Ahmed Jaabari in an air strike on a car in Gaza City.

The Arab-Israeli situation adds to the tensions in the Middle East region, where there has also been recent protests in Jordan and where Western tensions with Iran continue to fester, said Andy Lipow of Lipow Oil Associates.

On the other hand, an explosion and fire on a petroleum platform in the Gulf of Mexico near Louisiana that left nine workers injured and two missing did not affect oil prices, Lipow said.

The platform was not producing oil at the time, and no major oil spills have resulted, according to the US Coast Guard.


There were 22 people on board when the explosion rocked the rig operated by Houston, Texas-based Black Elk Energy shortly before 9:00 a.m. (1500 GMT), said Coast Guard spokesman Glenn Sanchez.

Black Elk Energy was not immediately available to comment but posted a message on its website saying “our thoughts and prayers are with those who are impacted.”

While tensions in the Middle East have boosted prices, fresh economic data in both the US and Europe point to continued economic uncertainty, serving as a brake on oil prices.

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TAGS: Business, Commodities, Energy, Middle East, oil, Price
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