Oil prices surged on Friday afternoon after news of a massive blast at an oil and gas facility off Staten Island in New York sparked panic on a market already nervous about the threat of war in Iraq.
In London, the price of reference Brent North Sea crude oil for April delivery rose to as high as $32.50 before easing back to $32.10, up 54 cents from the previous close. In New York, the price of a barrel of light sweet crude for April delivery hit a peak of $35.95 before settling back slightly to $35.40, still up 66 cents on the day.
An ExxonMobil spokeswoman confirmed that the company is the owner of the facility. The company is the largest oil firm in the world.
One eyewitness described hearing a huge explosion, after which thick black smoke began belching out of the facility, burning dangerously close to a docked tanker. New York Fire Department spokesman Michael Loughran said it was not immediately clear what had caused the blaze.
Burning oil from the facility appeared to spread into the Arthur Kill waterway, a busy shipping thoroughfare between Staten Island and New Jersey state.
News of the blast added to concerns about US oil supplies at a time when crude oil stock levels are at a 27-year low, the US is preparing for war in Iraq and Venezuelan exports continue to be disrupted by a strike.
Oil prices had already risen in early trading in London after US Defence Secretary Donald Rumsfeld said his forces were ready to attack Iraq if US President George W Bush gave the word.
A new draft resolution by Britain and the US, giving the international green light for conflict, could be presented at the United Nations as early as Monday, according to UK press reports.
