Bhutto assassination hits oil markets

28-Dec-07

Oil prices rose on dual concerns of larger than expected declines in U.S. crude inventories and growing geopolitical concerns after the assassination of Pakistani opposition leader Benazir Bhutto. Light, sweet crude for February delivery shot up to US$96.83 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. In London, Brent crude rose 33 cents to $95.11 a barrel on the ICE Futures exchange. Pakistani opposition politician Nawaz Sharif has vowed to boycott parliamentary elections on January 8 and demanded that President Pervez Musharraf resign immediately. In its weekly inventory report, the U.S. Energy Department's Energy Information Administration reported a 3.3 mln barrels drop last week, more than double the 1.3 million barrel decline analysts expected. Inventories of distillates, which include heating oil and diesel fuel, fell by 2.8 million barrels, much more than the expected drop of 800,000 barrels. Crude and heating oil stockpiles have declined more than expected for several weeks running, exacerbating a perception that supplies may be inadequate to meet winter demand.