Thursday, July 13, 2006

Oil hits record as Israel attacks

Oil hits record as Israel attacks
By Chris Flood
Copyright The Financial Times Limited 2006
Published: July 13 2006 08:56 | Last updated: July 13 2006 08:56

Oil prices surged to a record high on Thursday as violence in the Middle East escalated after Israel launched air strikes against the Lebanese capital, firing “at least six rockets” at the runways of Rafik al-Hariri International Airport in Beirut.

IPE August Brent rose more than 1 per cent to a record $75.45 a barrel before easing back slightly to $75.31.

Nymex August West texas intermediate also rose more than 1 per cent to a record $75.89 a barrel before edging back to $75.75 in electronic trade.

The escalating violence in the Middle East adds to ongoing geo-political tensions over Iran’s nuclear enrichment programme and concerns over North Korea’s missle development programme.

The Israeli stock market was affected by the upswing in violence with the benchmark TA-25 index down 3.7 per cent to 752.96 while the broader TA-100 index fell 4.1 per cent to 763.64.

The Israeli currency was also weaker with the sheckel trading 1.7 per cent lower against the dollar at Shk4.3675.

The geo-politcal tensions saw gold firmer at $650.90 a troy ounce from New York’s late quote of $649.25.

Analysts have warned that oil prices could spike to $100 a barrel if the situation in the Middle East continues to deteriorate against a background of extremely strong demand fundamentals. On Wednesday, the International Energy Agency said

growth in demand was expected to rise more quickly through 2011 than it had for a decade.

The IEA forecast that the world would need an extra 1.57m barrels a day more oil to supply economic growth in 2007, up from the projected growth of 1.21m barrels a day this year.


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