World oil prices rose over $1 today after the kidnapping of eight Westerners working on an offshore oil rig in Nigeria and on tensions over Iran.
Traders also absorbed an announcement by the Organisation of Petroleum Exporting Countries that it would maintain oil output at 28 million barrels per day.
New York's main contract, light sweet crude for delivery in July, jumped $1.51 to $71.85 a barrel in pit trading. In London, Brent North Sea crude for July delivery surged $1.28 to $70.67 a barrel in electronic deals.
Eight Westerners - six British, one American and one Canadian - were kidnapped today as they worked on an offshore oil rig in Nigeria, Africa's biggest producer of crude.
Crude futures, meanwhile, rose after shedding about $1 yesterday after data from the US Department of Energy showed a rise in US energy reserves. Prices were also supported today by concerns over Iran.
Market watchers say that Iran - the world's fourth largest producer of crude and the second-biggest member of OPEC - might cut oil exports in the face of sanctions.
Six world powers agreed yesterday on a incentive package of benefits if Iran suspended its nuclear fuel work, which has raised fears of weapons development, but threatened penalties if Tehran refuses to comply. However, market expectations are that Iran will reject the package, paving the way for possible UN sanctions over its disputed nuclear ambitions.
Elsewhere OPEC ministers, meeting in the Venezuelan capital of Caracas, agreed yesterday to keep oil output at a 25-year high - but said they would watch for any signs of a global slowdown that might merit a cut in the months ahead.
