New York, Jan 17: World oil prices shot to a new post-Iraq war high yesterday, with the New York contract piercing 35 dollars a barrel as an arctic chill gripped the northeastern United States. New York's benchmark light sweet crude contract for delivery in February soared 1.63 dollars to 35.07 dollars a barrel. Brent North Sea crude surged 1.13 dollars to 30.47 dollars.
The US national weather service issued wind chill warnings for several states in the northeast, warning of "life-threatening" and "extremely dangerous" conditions.
The winter freeze combined with worries about historically low crude oil inventories to boost prices, more than reversing a slide in oil prices the previous day, traders said.
"We had a sell off yesterday and the weather is real cold - I think that is having an impact," said Bill O'Grady, director of futures research at AG Edwards.
Inventories of crude oil were low, he conceded.
"But nobody uses crude, everybody uses (petroleum) product and product inventories are okay. There is plenty of diesel and heating oil inventories are above average."
The surge in crude oil prices coincided with more news of planned arrests at the Russian oil giant Yukos, O'Grady said.
Traders were concerned that Moscow's growing influence over the oil sector could lead in the future to greater cooperation with the Organisation of Petroleum Exporting Countries in limiting oil output, he said. Bureau Report