New York crude oil hits record high 70.88 usd/barrel on Middle East fears

LONDON (AFX) - The price of New York's light sweet crude has hit a historic peak of 70.88 usd per barrel in electronic trading on concern about possible military conflict between the US and Iran.

It beat a record of 70.85 usd reached on Aug 30, 2005, when Hurricane Katrina had battered oil facilities on the US Gulf Coast.

At about 0825 GMT, New York light sweet crude for May delivery was up 39 cents to 70.79 usd.

Brent crude for June delivery was up 57 cents to 72.03 usd in electronic deals. Earlier today, it also hit a record high 72.20 usd per barrel. The Brent contract has been striking record highs since April 10 on market concerns that the US might launch strikes at uranium facilities in Iran.

The US administration said yesterday that Iran's announcement that it was working on advanced P-2 centrifuges to enrich uranium was another signal that the Islamic republic's nuclear programme is not purely civilian.

The suicide bomb attack in Tel Aviv yesterday that left nine people dead and dozens wounded has also raised fears about the Middle East. The attack was claimed by Islamic Jihad.

Victor Shum, a Singapore-based analyst with global consultancy Purvin and Gertz, said the attack and the Iranian nuclear row reflect the political volatility in the oil-producing Middle East, which has fuelled fears of supply disruptions in the event of a conflict.

'With all these events in the Middle East, prices hit the psychological level of 70 usd and settled above it,' he added.

Although consumers have access to large supplies of heavy, sour crude, refiners prefer light, sweet oil because of its low sulphur content and relatively high yields of gasoline, heating oil, diesel and jet fuel.

Adjusted for inflation, current oil prices remain below levels reached after the 1979 Iranian revolution when they surged to upwards of 80.0 usd per barrel in today's money. New York crude hits historic high

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