Missile tension sends oil surging
By CNN's Jonathan Schienberg
YOUR E-MAIL ALERTS
NEW YORK (CNN) -- Tensions with North Korea helped send the price of oil rocketing to a record in New York Wednesday, with crude oil settling at $75.19 per barrel, up $1.26 on the NYMEX.
The previous record high was April 21, when it closed at $75.17.
Crude also hit an intra-day high Wednesday of $75.40 -- topping the previous high of $75.35, also from April 21.
London Brent crude was up $1.52 to $74.03.
Stock markets around the world also reacted to the tests, with Wall Street, Asia and Europe all closing lower.
Oil analysts attributed the price swell to international tensions over North Korea and other unsettling geopolitical factors (Full story).
"Oil and politics make a bad mix," said Fadel Gheit, Oppenheimer & Co. senior energy analyst.
"Geopolitics are always at center stage when it comes to the oil market, and the North Korea missile launch is causing jitters in the market because ultimately it will make the situation with Iran much more difficult to deal with," Gheit added.
Gheit said that oil markets would interpret U.S. handling of the North Korean missile crisis as "kid glove treatment" compared with its handling of Iran, and that would in turn pose problems in the Iran nuclear standoff.
NYMEX Director George Gero, who is also senior vice president at RBC Dain Rauscher, said the election controversy in Mexico -- where candidate Andres Manuel Lopez Obrador was neck and neck with conservative Felipe Calderon -- also factored into the price hike.
"Oil traders are nervous that Obrador, the leftist candidate, may emerge victorious, and he is viewed as another Hugo Chavez," Gero said, referring to Venezuela's leftist president.
Gero also cited the dollar, which has been devalued more than 25 percent this year. That, he said, makes oil producers raise prices.
|© 2007 Cable News Network LP, LLLP.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us. Site Map.