Oil rises, worries of U.S. retaliation
Oil rises, worries of U.S. retaliation
LONDON (AFP): The price of oil climbed here on Friday on the back of renewed concerns about the prospect of possible U.S. retaliation for the atrocities targeted on New York and Washington.
Brent North Sea crude for November delivery rose 79 cents a barrel to US$29.16.
The New York market remained shut, while the London Petroleum Exchange said it would close early at 16:45 GMT (11.45 p.m. Jakarta time) at the request of traders and clients.
Oil prices have been caught in a two-way pull since the devastating attacks on U.S. targets on Tuesday. Concerns that U.S. retaliation could draw Gulf Arab producer nations into a wider conflict have been pulling against concerns about the impact on crude demand of the assault on the hub of global capitalism.
"The market's very nervy," said David Nesbitt, a broker with the Prudential Bache house.
"The crude is also reacting to headlines like, 'Taliban chief spokesman warns of revenge if U.S. attacks Afghanistan', and that's just taken us though $29," he told AFP.
Recent comments from U.S. leaders have fueled renewed concern that Arab oil producing countries could turn to the oil weapon in the face of any US retaliation, despite widespread condemnation of the attacks by Arab leaders, with the notable exception of Iraq.
Traders have not forgotten the price surges of 1973-4, 1990 and last autumn that followed stand-offs between Western powers and Arab crude producers.
The United States said on Thursday that Saudi terrorist Osama bin Laden, thought to be living in Afghanistan, was a prime suspect in Tuesday's attacks.
The U.S. administration has not yet given any information about any possible response.
The Afghan Taliban Islamic militia warned on Friday that it expected to be hit by a massive attack by the United States and vowed that it would take revenge.
"We are ready to pay any price to defend ourselves and to use all means to take our revenge," a spokesman for Taliban supreme leader Mullah Mohammad Omar told AFP in Kabul by satellite phone from the Taliban stronghold of Kandahar.
Lawrence Eagles, a commodities expert with the GNI brokerage, said: "It is generally viewed as a certainty that the U.S. will respond to this attack in some fashion, and there remains a small fear that it may lose some Middle Eastern support as a result."
The Organization of Petroleum Exporting Countries (OPEC) has promised to pump enough oil to world markets to ensure their stability after the attacks.
The OPEC basket price, which the cartel targets at $25, rose to $26.23 a barrel on Thursday from $26 on Wednesday, the OPECNA agency reported from Vienna.