Oil leaps as Iraqi talks in trouble
Oil burst higher than US$20 per barrel yesterday as heavy buying took place on the back of renewed confidence that sanctions on Iraqi oil sales were not about to be lifted.
Nymex crude opened in New York $0.92 higher at $22.45 per barrel and threatened to test the high on the June contract of $22.98. It stood at $22.25 at midday in New York.
On the International Petroleum Exchange (IPE) in London, June Brent crude futures shot up $1.17 to $20.20 per barrel, recovering $2 from a low last week, then retreated when Nymex opened to reach $19.88 at the London close.
Tim Evans, of Pegasus Econometrics in New York, said: 'The rebound has exceeded our expectations for a 50 per cent retracement of last week's decline.' Analysts in London said talks between Iraq and the United Nations over a plan to swap food for oil had run into trouble after Britain and the United States insisted on changes to the memorandum of understanding.
It is understood that London and Washington want to ensure that the Iraqis do not control the distribution of aid.
Iraq's chief negotiator, Abdul Amir al-Anbari, said the draft had been changed significantly, and he wanted a response from Baghdad.
One trader said: 'Anbari is obviously upset.
'The market is seeing a good buying opportunity.'
