Oil prices higher in Asia |
Oil prices traded higher in Asian hours Friday after UK energy giant BP reduced output from its biggest oil field in the United States due to new technical problems, dealers said.
The production cut added to market concerns arising from possible UN sanctions against Iran and the potential for damage to Gulf of Mexico oil installations from Tropical Storm Debby.
At 3:00 pm (0700 GMT), New York's main contract, light sweet crude for October delivery was up 61 cents to 72.97 US dollars a barrel from its close of 72.36 dollars in the United States Thursday.
Brent North Sea crude for October delivery rose 47 cents to 73.15 dollars.
Analysts said the market was reacting to BP's output cut in the gigantic Prudhoe Bay oil field in Alaska due to a new pipeline leak.
"This cutback in production is an enormous amount of oil and the market is adjusting to its effect," said Mark Pervan, an energy analyst for Daiwa Securities based in Melbourne.
Prudhoe Bay, the biggest oil field in the United States, was already operating at about half its normal output of 400,000 bpd owing to a pipeline leak revealed earlier this month that had also sent prices higher.
A company spokesman told AFP in London that output had been cut by an extra 90,000 barrels
per day (bpd) at the vast field, bringing production down to about 110,000 bpd.
Tropical Storm Debby has also stoked the interest of speculative buyers due to potential risks to oil production platforms in the US Gulf Coast, while the market remained volatile after world powers reacted coolly to Iran's response to efforts on curbing its nuclear ambitions.
In line with a UN Security Council resolution, the United States and its European allies insist that Iran must stop enriching uranium by August 31 or face the threat of sanctions.
Iran has refuted allegations that its enrichment work was a mask to develop nuclear weapons, saying the research is meant for peaceful purposes.
Analysts fear that sanctions on the Islamic republic will disrupt Iran's vital oil supplies. Iran is the world's fourth largest crude producer, pumping about 4.0 million barrels of oil per day of which around 2.7 million barrels are exported.
"The market is positioning itself for UN sanctions" said Pervan.