Oil price soars on supply jitters

An Iraqi worker operates valves at the Rumaila oil refinery, on Nov. 9, 2009. THE CANADIAN PRESS/AP, Nabil al-Jourani

NEW YORK, N.Y. - The price of oil rose more than three per cent Tuesday on concerns about supplies from the Middle East and the North Sea.

Benchmark West Texas Intermediate crude gained $2.86, or 3.2 per cent, to US$92.19 a barrel in afternoon trading in New York. In London, Brent crude, which is used to price international varieties of oil, rose $2.38, or 2.1 per cent, to US$114.20 a barrel.

Analysts said that some North Sea oil rigs have been slow to resume production after undergoing maintenance. There is also concern that tensions between Turkey and Syria could escalate and disrupt supplies from the Middle East. The Middle East and North Africa account for about a third of global oil production.

Saudi Arabia's oil minister tried to ease concerns about supply. Ali al-Naimi told reporters that his country now pumps around 10 million barrels a day, and said its production capacity of more than 12 million barrels is sufficient to meet any world demand.

Worries about supplies also seemed to trump bearish news from the International Monetary Fund. The international lending organization cut its global growth forecast to 3.3 per cent for this year from 3.5 per cent and said advanced economies are at the risk of another recession.

In other energy futures trading in New York, wholesale gasoline rose eight cents, or 2.6 per cent, to US$2.97 a U.S. gallon (3.79 litres), natural gas rose two cents to US$3.42 per 1,000 cubic feet and heating oil advanced six cents to US$3.20 a gallon.

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