Oil prices rise amid eurozone, Korea tensions

24th November 2010, Comments 0 comments

World oil prices rose on Wednesday, before the latest US energy report, with traders on tenterhooks over the eurozone debt crisis and simmering tensions on the Korean peninsula, analysts said.

Brent North Sea crude for delivery in January added 46 cents to 83.71 dollars a barrel in London morning trade.

New York's main contract, light sweet crude for January, firmed 32 cents to 81.57 dollars.

Prices fell on Tuesday amid a broader market sell-off as traders feared that a spike in tensions between North and South Korea could impact global trade.

"The oil market is under pressure, with crude oil prices consolidating around the 82 dollars-per-barrel area," said Sucden analyst Myrto Sokou.

"Investors remain sceptical that Ireland will not be the last of the eurozone's financial instabilities while the main attention has switched to the fragilities of Portugal and Spain.

"It seems that the eurozone debt crisis has deepened, and in addition the political tensions in the Korean peninsula added further 'dust' in the uncertain geopolitical conditions."

She added: "However, for the rest of the week, volumes might be light with choppy trading conditions due to the US Thanksgiving holiday (on Thursday)."

World financial markets have been rocked this week by eurozone debt worries and after North Korea fired dozens of artillery shells onto a South Korean island on Tuesday, killing four people and triggering an exchange of fire.

The news has lifted the US currency which is widely regarded by investors as a safe-haven in times of geopolitical uncertainty.

Later on Wednesday, the oil market will digest the US government's latest snapshot of crude inventories in the key energy-consuming nation.

Analysts predict that American crude inventories tumbled by 1.9 million barrels in the week ending November 19, Dow Jones Newswires said.

Gasoline or petrol stockpiles are seen falling by 900,000 barrels, while stocks of distillates, which include heating oil and diesel, are expected to have dropped 1.5 million barrels.

© 2010 AFP

0 Comments To This Article