Oil hits weeks high on row in Mideast

LONDON - Agence France-Presse

New York crude reaches its highest level in the three and a half months. REUTERS photo

World oil prices rose with New York crude reaching the highest level for three and a half months on tensions between Iran and Israel, and economic recovery hopes, analysts said.

New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in September reached as high as $96.53 a barrel -- the highest point since May 11. It later stood at $96.15, up 14 cents compared with close on Aug. 17.

Brent North Sea crude for delivery in October climbed 66 cents to $114.37 in London midday deals.
Analysts at JBC Energy research group said “growing tensions in the Middle East and hints of new economic stimulus measures” were supporting prices.

Israel’s media is increasingly speaking about an imminent unilateral strike being prepared by the country against nuclear sites in major oil producer Iran.

Israel, like its close ally the United States, accuses Iran of seeking to develop an atomic arsenal.
Tehran denies this, and says its nuclear programme is exclusively peaceful, while its military chiefs warn that they will destroy Israel if it attacks.

JBC Energy analysts yesterday added that New York oil prices may have won a boost from comments by the head of the International Energy Agency, Maria van der Hoeven, who on Friday ruled out the need to tap into U.S. oil reserves.

Commerzbank analyst Carsten Fritsch said oil prices were recouping some of the losses suffered on Aug. 17.

“The fall in price had been triggered by US plans to tap into strategic reserves,” he added.

Media reports have said the United States is considering the possibility of releasing extra oil supplies to help bring down crude prices, which it deems too high and thus a strain on economic recovery.

Analysts say such a move would give a boost to US President Barack Obama in his quest to win re-election later this year.