Business | Oil & Gas
Crude up as Saudi pledge fails to reassure markets
Oil bounced off lows to stand above $136 a barrel on Monday, spurred by tension between Israel and Iran and as Saudi Arabia's promise to pump more oil failed to win over a sceptical market.
- Reuters
- Published: 23:33 June 23, 2008
London: Oil bounced off lows to stand above $136 a barrel on Monday, spurred by tension between Israel and Iran and as Saudi Arabia's promise to pump more oil failed to win over a sceptical market.
Oil, which rallied more than $2 earlier in the session, had briefly fell on the back of gains in the dollar amid rising expectations a worsening inflation outlook might prompt the Federal Reserve to raise rates.
US light crude for August delivery rose 75 cents to $136.11 a barrel by 1439 GMT in choppy trading between $134 and $137.50 a barrel.
London Brent crude was 63 cents up at $135.49.
A ceasefire by rebels halting attacks on facilities in the Niger delta barely tempered the rise after two new attacks over the past week knocked out another tranche of Nigerian output.
Some 340,000 bpd of Nigerian output was halted by militant attacks last week, and more threats to production emerged yesterday as Nigera's oil workers union began a limited strike at Chevron.
"Bellicose rhetoric between Israel and Iran and escalated militancy in Nigeria reduced what little optimism there was surrounding the Saudi's meeting in Jeddah over the weekend," said John Kilduff, senior vice president at MF Global.
Oil prices hit a record near $140 a barrel last week and have doubled from a year ago, stoking inflation and triggering protests worldwide. A meeting of top energy policy makers in Jeddah offered little hope for a quick fix.
Saudi Arabia confirmed it will lift production for a second time to 9.7 million barrels per day (bpd) in July, its highest in more than 30 years, and pledged on Sunday to pump even more if the market demanded it.
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