Oil prices strike ten-month peaks

LONDON: World oil prices surged on Thursday to new ten-month high points amid unrest in key crude producer Nigeria and jitters about tight motor fuel reserves in the United States. 

In London, Brent North Sea crude for August delivery soared to US$74.15 per barrel - which was last seen on August 15, 2006. The contract later stood at US$73.92, up 87 cents from Wednesday's close. 

On Thursday, New York's main oil futures contract, light sweet crude for delivery in August, hit US$72.05 per barrel - the highest level since August 25. It later stood at US$71.93, marking a gain of 52 cents. 

"Crude futures pushed even higher (on Thursday), extending gains from yesterday ahead of today's (US) fuel inventories report," said Sucden analyst Andrey Kryuchenkov. 

He added: "There was more news about fresh violence in Nigeria this morning, where gunmen kidnapped a three-year-old daughter of an expat working in Port Harcourt, as violence escalates in the region." 

In Nigeria, Rivers State police spokeswoman Ireju Barasua identified the girl as Margaret Hill and said she was snatched as she was being dropped at her school. 

The incident came barely 24 hours after Wednesday's kidnapping of five foreigners - two New Zealanders, an Australian, a Lebanese and a Venezuelan - working for a drilling company, Lone Star, in the same Rivers State. 

The five were in the process of drilling a well for Anglo-Dutch oil giant Royal Dutch Shell in the Soku region when they were seized. 

Nigeria, which is the world's sixth-largest oil producer, pumps 2.6 million barrels per day of crude but is losing some 25 per cent of its exports to unrest in the country's volatile oil-producing south. 

Aside from geopolitical concerns, traders were on tenterhooks before the US Department of Energy's weekly update on American energy inventories. 

"I think everybody's ... waiting for the inventory numbers," said Steve Rowles, an analyst at CFC Seymour in Hong Kong. 

Rowles said he expected a build in stockpiles, especially on the gasoline side, "which I think should bring down the overall price of crude." 

The report was to be issued a day later than usual because of the US Independence Day holiday on Wednesday. 

Gasoline demand soars during the so-called driving season in the United States because many Americans hit the roads for their summer vacations.