Asian Crude Prices Jump On Us Attack
One economist said West Texas Intermediate (WTI) crude prices, a benchmark traded on the New York Mercantile Exchange (NYMEX), could reach $30 per barrel, a level not seen since October 1990 after Iraqs invasion of Kuwait in August that year.
Other traders were less bullish and suggested, barring a fresh escalation of hostilities, that prices were more likely to trade up to $25 per barrel at the most.
The Nymex October contract, which trades in Asia on a screen-based system called Access, touched a high of $24.00 per barrel after news around 0558 GMT that the US had launched cruise missiles against Iraqi air defence targets.
By 0803 GMT the October Nymex contract last traded at $23.90, up from the New York close on Friday of $22.25.
One oil company trader said he thought the confrontation between the US and Iraq would be short-lived.
I think the markets being level-headed about the news, he said and predicted Nymex October crude would rise no higher than $24 or $25 per barrel.
He said the market would need a major escalation in hostilities for prices to take off.
The key front month contract on Nymex reached as high as $41.15 in October 1990. Brent North Sea crude oil reached $40.95 the same month.
Brent prices trading on the Singapore International Monetary Exchange (SIMEX) rose to $23.50 after the missile attack, up from a London Brent close on Monday of $21.99. October Brent closed on Simex at $22.50.
Crude oil traders said the price rise was also supported by the UNs move to put a $2 billion Iraqi oil-for-food deal on hold.
Traders had expected Iraqi oil exports of as much as 7,00,000 barrels per day to start during September.