Business | Oil & Gas
Oil climbs as Georgia fight disrupts supply
Oil traded near $115 on Monday, off early highs as concerns about global demand outweighed supply disruption in the Caspian region.
- Reuters
- Published: 20:42 August 11, 2008
London: Oil traded near $115 on Monday, off early highs as concerns about global demand outweighed supply disruption in the Caspian region.
US light crude for Sep-tember delivery was up 18 cents at $115.38 a barrel by 1420GMT, off highs of $116.90. London Brent crude rose 38 cents to $113.71.
Oil fell by more than $5 on Friday, when it largely ignored the outbreak of hostilities between Russia and Georgia in the Caucasus region, a key transit route for oil and gas from the Caspian, to focus on concerns about global economic growth.
"Even with what is a serious situation in Georgia, with pipelines threatened perhaps, we haven't had much of a bounce back," said Simon Wardell, an analyst at Global Insight.
"All it seems to have done is halted the speed of the fall."
Oil has shed about $31, or 21 per cent, from its peak of over $147.27 struck on July 11 on concerns of a slowdown in demand.
Analysts said oil's gain was also tempered by the rising US dollar, which vaulted to a six-month high against a basket of currencieson Monday.
Georgia's oil ports of Supsa and Batumi, used to export Azeri crude oil, are operating only partially, while the Georgian port of Poti is not operating, a shipping agent said on Monday.
Kazakhstan also stopped shipments of its crude from Georgia's Batumi port. Both Azerbaijan and Kazakhstan also use crude pipelines for export.
A major oil pipeline exporting Azeri crude passes through Georgia but was disabled last week on Turkish territory before the conflict erupted.
A fire in eastern Turkey on the Baku-Tblisi-Ceyhan (BTC) pipeline halted loadings of Azeri Light crude shipped to the Turkish port of Ceyhan.
The blaze was extinguished yesterday and repairs may take one to two weeks or longer, a source at the pipeline consortium said.
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