The price of crude oil has jumped to its highest level in more than three-and-a-half years after reports of a blast at a pipeline in Saudi Arabia, the world’s biggest oil producer.
Brent crude rose $5.74 to $128.40 per barrel in late Thursday trading in New York, the highest since July 2008.
However, prices eased a bit after Saudi officials denied the reports.
Brent was trading at $125.86 per barrel in Asian trade on Friday, with US light sweet crude at $108.92 per barrel.
The new high set on Thursday beat the level seen during the Libyan civil war last year.‘Market nervousness’
Oil prices have been rising since the start of the year amid concerns about the tensions between Iran and the West over its controversial nuclear programme.
The US has imposed fresh sanctions against Tehran targeting the country’s oil exports, while the European Union has announced a ban on imports of Iranian oil.
For its part, Iran has threatened that it will close the Straits of Hormuz, a vital oil-trade route for oil from the Gulf - including Saudi oil - if the West imposes more sanctions.
Analysts said all these issues had created an uncertainty over oil supplies and the latest reports had only fanned those fears further.
“The sharp move up on the pipeline story points to the market nervousness on anything related to supply problems,” said Gene McGillan of Tradition Energy. More