World oil prices raced past three-month highs this evening, breaching $65 in New York and $64 in London on rising supply concerns over Iran and Nigeria.
New York's main contract, light sweet crude for delivery in February, jumped $1.56 to $65.48 a barrel in pit dealing. It had earlier climbed to $65.53 - the highest intra-day level since October 3, 2005.
In London, the price of Brent North Sea crude for March delivery soared $1.08 to $64.26 a barrel in electronic deals. The February contract had expired yesterday at $62.93 a barrel. Earlier today, the March contract reached $64.43, the highest level since September 29 last year.
Nigerian separatists warned Anglo-Dutch oil giant Shell and other foreign oil companies today to leave southern oil-rich Niger-Delta or face action. The past week has seen unrest in the southern region where armed gangs have kidnapped four foreign oilmen working for Shell and sabotaged an oil pipeline, costing the firm over 200,000 bpd. Nigeria is the world's sixth-biggest crude exporter.
Crude futures have gained around 5% since the start of 2006, driven by geo-political concerns, particularly regarding Nigeria and Iran. Europe's leading nations were pressing for an emergency meeting of the UN atomic watchdog over Iran's nuclear programme, amid signs that Tehran may yet agree to a compromise proposal from Russia.
After talks in London yesterday that also included officials from China, Russia and the US, the EU troika of Britain, France and Germany said it wanted the International Atomic Energy Agency to meet on February 2-3.
Investors fear that economic sanctions against Iran might prompt the oil-rich nation to call a halt to its crude exports. Iran exports some 2.7 million barrels per day of crude, mainly to Asian and European countries.
Traders were also absorbing the International Energy Agency's monthly review of the oil market. Demand for oil in China and the US will drive a 2.2% increase in global oil consumption this year and an anticipated seasonal fall in demand in the second quarter looks uncertain, the IEA said today.
The agency also said that it had revised down its forecast for growth of demand for oil in 2005 to 1.3% from a previous estimate of 1.4%. In 2006, global oil consumption is forecast to average 85.1 million barrels per day, an additional 1.8 mbd compared with 2005, the IEA said.
