Oil prices rise past mid-$87 a barrel

Source: Energy Digital

Date :18/10/2007 06:54:37

Oil prices rose in Asia today as futures rose on inventory outlooks and worries over a possible attack by Turkey on Kurdish rebels in northern Iraq.

Light, sweet crude for November delivery rose 40 cents to $87.80 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

Slight drop

The Nymex crude contract lost 21 cents to settle at $87.40 a barrel Wednesday in the U.S. after trading at a record $89 a barrel.

"Short-covering" could be behind the late rise in Asia after the plunge from Wednesday's record, said Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo. Short-covering refers to buying by investors who had bet prices would fall.

The rise could also be due to "concerns about the tensions between Turkey and Iraq and possible disruption of oil from Turkey's port," Emori said.

Some Iraqi oil is piped to the Turkish export terminal of Ceyhan and traders worry tension between Turkey and Iraq would disrupt those deliveries. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing the past two months, and in recent days was being shipped at a rate of about 500,000 barrels a day, according to Dow Jones Newswires.

Sudden rise

On Wednesday, though, unexpectedly large gains in U.S. crude oil and gasoline inventories won the day over news that Turkey's parliament approved a government plan to attack Kurdish rebels in northern Iraq.

Nymex heating oil futures rose 1.05 cent to $2.3294 a gallon while gasoline prices added 0.48 cent to $2.1514 a gallon. November natural gas futures fell 6.2 cents to $7.396 per 1,000 cubic feet.

October 18, 2007