Oil prices rose in London on Monday ahead of the start of full trading as dealers reacted to a presumed sabotage attack on a key Iraqi oil pipeline, putting it out of service for up to a month.
The price of reference Brent North Sea crude oil for October delivery rose 39c per barrel to $29,20 in out-of-hours electronic deals ahead of the start of London trade at 10am (9am GMT).
New York’s light sweet crude benchmark September contract showed a gain of 33c to $31,38 per barrel, also in out-of-hours trading.
United States forces in Iraq have warned that repairing the main export pipeline to Turkey might take up to a month after a blast that started a huge blaze.
The pipeline from Iraq’s northern oilfields around Kirkuk to the Turkish terminal of Ceyhan was attacked on Friday when unknown assailants blew up a section near Baiji.
The sabotage could cost as much as $7-million a day, US officials say.
Income generated from the restoration of Iraqi oil exports is central to plans made by the US-led administration in Baghdad to rebuild the war-scarred country.
Iraq sits on the world’s second-biggest oil reserves, but decades of conflict as well as United Nations sanctions following the first Gulf War in 1991 have left its oil infrastructure severely dilapidated.
The process of restoring the industry has been hampered even further following the ousting of Saddam Hussein’s regime by widespread looting and a series of other sabotage attacks on pipelines.
Also of worry to dealers on Monday was weekend conflict between ethnic militants and security forces in Nigeria’s oil city of Warri.
Similar fighting in March forced Anglo-Dutch oil major Shell, its US rival ChevronTexaco and France’s Total to evacuate most of their facilities in the western Delta area, slashing Nigerian production by 40%. — Sapa-AFP
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