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Oil holds above US$121 on tension with Russia

Oil holds above US$121 on tension with Russia

Oil prices held above US$121 a barrel Friday in Asia after jumping more than US$5 overnight as investors mulled the likelihood that tension with Russia would further disrupt crude supplies to the West.
Light, sweet crude for October delivery was up 21 cents at US$121.39 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract rose US$5.62 overnight to settle at US$121.18 a barrel.
"It's still speculative whether Russia will use oil as a weapon to punish the West," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "But it has certainly focused the market on that geopolitical threat."
The United States and Poland signed a deal Wednesday to place a U.S. missile defense base just 115 miles (180 kilometers) from Russia's westernmost border _ a move quickly denounced by Moscow.
Russia's Foreign Ministry warned that Moscow's response to further development of the missile defense shield would go beyond diplomacy.
U.S. Secretary of State Condoleezza Rice has dismissed any suggestion that the missile defense interceptors to be based in Poland constitute a threat to Russia. Washington says the base is a way to defend the U.S. and Europe from the possible threat of long-distance missiles from Iran.
Russian forces also lingered deep in Georgia on Thursday, digging trenches and setting up mortars a day before Kremlin officials promised to complete a troop withdrawal from the former Soviet republic. A top Russian general said it could be 10 days before the bulk of the troops left.
Western leaders remained adamant that Russia remove its troops and do it quickly.
U.S. Senator Joe Lieberman said Thursday he wants to see Russia kicked out of the Group of Eight "for a while" and denied entry into the World Trade Organization as punishment for its actions in Georgia.
"The Russian-Georgia conflict has disrupted supplies and it looks like it will drag on and create a lot of uncertainty," Shum said.
London-based BP PLC last week shut down its Baku-Supsa oil pipeline _ which runs through the center of Georgia from Baku in Azerbaijan to Supsa on Georgia's Black Sea coast _ because of security concerns.
The line, which has the capacity to pump up to 150,000 barrels a day, had recently been pumping around 90,000 barrels a day, according to a BP spokeswoman.
The British oil company also said that testing was to begin Wednesday on the closed Baku-Tbilisi-Ceyhan oil pipeline _ which runs through Georgia as well _ ahead of a move to restart full operations as early as next week.
That line, owned by a consortium of energy companies led by BP, has been closed for more than two weeks after a fire on its Turkish stretch. Kurdish rebels have taken responsibility for that blaze.
In other Nymex trading, heating oil futures rose 0.14 cent to US$3.302 a gallon, while gasoline prices rose 0.03 cent to US$3.0455 a gallon. Natural gas futures increased 4.8 cents to US$8.30 per 1,000 cubic feet.
In London, October Brent crude rose 28 cents to US$120.44 a barrel.


Updated : 2021-01-25 19:18 GMT+08:00