Oil prices rise after pipeline fire in Turkey

Oil prices jumped back above $120 a barrel after Kurdish rebels reportedly admitted causing a fire at an oil pipeline.

Oil prices jumped back above $120 a barrel today, rising for the first time in four days after Kurdish rebels reportedly admitted causing a fire at an oil pipeline in Turkey. Light, sweet crude for September delivery advanced US$1.64 (Dh6) to $120.20 a barrel on the New York Mercantile Exchange, after earlier rising as high as $121.78. Prices fell to $118.58 yesterday. In London, September Brent crude added $1.45 to $118.51 a barrel.

Pro-Kurdish news agency Firat said Kurdish rebels have claimed responsibility for a fire on a Turkish section of the Baku-Tbilisi-Ceyhan pipeline. The fire forced workers to shut down two valves along the pipeline as a precaution, halting the flow of all oil being sent to Ceyhan terminal from the east. But officials said shipments were not affected. Still, the report raised the possibility of a long shutdown of the U.S.-backed 1,760-kilometre pipeline, which can pump slightly more than 1 million barrels of crude oil per day, or more than 1 per cent of the world's daily crude output. "If it's down for a month, that would delay shipment of as much as 30 million barrels of juice, which is a huge chunk even amid this demand destruction we're seeing," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois. The market was also eyeing more tension over Iran's nuclear program.

*AP