Oil prices inch up on news of pipeline leak from Russia

01-Aug-06

Oil prices inched up as news of a Russian pipeline leak spread and violence continued in the Middle East. Light sweet crude for September delivery rose by 6 cents to US$74.46 in midmorning Asian electronic trading on the New York Mercantile Exchange. The market is keenly observing effects of an oil spill in Russia's western Bryansk region on the border with Ukraine and Belarus. The spill that occurred on Saturday, affected a 10 sq.km area and contaminated water sources. Violence between Israel and Hezbollah guerrillas in Lebanon for the past three weeks have persisted causing fear of possible supply interruptions in the region as Iran, OPEC's No. 2 supplier, is a backer of Hezbollah. The U.N. Security Council has passed a resolution giving Iran until Aug. 31 to suspend uranium enrichment or face the threat of economic and diplomatic sanctions.