Oil trades higher after Bali bomb blasts
Oil trades higher after Bali bomb blasts
Reuters, London
World crude prices traded higher on Monday after a devastating
bomb attack in the Indonesian resort of Bali added to underlying
nervousness, although traders said it had no immediate
consequences for oil trade.
Gains were bolstered by fears that a tropical depression
forming in the Caribbean Sea could move into the Gulf of Mexico
and hit the region's oil supplies as Hurricane Lili did earlier
this month.
New York crude futures for November delivery settled 66 cents
higher at US$30.03, while in London Brent crude closed 50 cents
stronger at $28.49 a barrel. Volumes were low because of the
Columbus Day holiday in the United States.
Dealers said the attack had increased concerns that more
terrorist attacks would take place and potentially it could be
seen as bolstering U.S. President George W. Bush's case for
military action against Iraq as the next stage of his war on
terrorism.
"It (Bali) does not look like a factor, but instability is an
ongoing problem," said Mark Head of Fimat International Banque.
The killing of more than 180 people on the Indonesian resort
island of Bali on Saturday came a day after the U.S. Congress
gave Bush authority for the possible use of force to disarm Iraq
of suspected biological and chemical weapons and topple Iraqi
leader Saddam Hussein.
The weekend blast also coincided with news that last week's
explosion on a French supertanker in the Gulf of Aden was almost
certainly a deliberate attack.
Yemen, trying to shed an image as a haven for Islamic
militants, initially said a fire caused the explosion, which
killed one crewman, but sources close to the government-led probe
said the Arab state was now sure it was deliberate.
The blasts have heightened concern that the Islamic militant
network al Qaeda, blamed for the Sept. 11 attacks last year on
the United States, has regrouped after it was routed from
Afghanistan by U.S.-led forces.
In a statement released by the White House after the bombings
in Bali, Bush said: "The world must confront this global menace,
terrorism."
Bush has been pressing for the removal of Iraq's Saddam, who
he claims has amassed an arsenal of biological and chemical
weapons and may even be close to nuclear capability.
Although Bush's stance on Saddam is supported by Britain,
Washington has yet to convince other permanent members of the
U.N. Security Council -- France, China and Russia -- to agree to
a tough new U.N. resolution leaving room for military action if
Baghdad fails to meet terms for the return of weapons inspectors.
Although prices have retreated slightly, fears of a U.S.-led
attack on Iraq had driven oil prices to 12-months highs of over
$30 a barrel in the past few weeks, as traders feared any strike
might lead to a spread of violence in the oil-rich Middle East
and disrupt essential flows of crude oil.
Despite high oil prices, which some economists say could halt
the fragile economic recovery, OPEC officials said at the weekend
they saw no need to inject more crude oil into the market.
They implied current price levels were the result of
speculation of a possible war rather than a shortage.