Nuclear dispute fuels oil price

28 September 2007

The growing tension between the US and Iran helped to push the price of crude oil up significantly on Thursday.

An ongoing dispute about the Iranian nuclear power programme has led to fears of further unrest in the Middle East, which could disrupt oil supplies.

The issue, coupled with existing concerns about a potential gap between supply and demand in the fourth quarter and the poor performance of the dollar on the currency markets, saw the price of London Brent crude rise to its highest ever level.

It gained $2.60 a barrel to close at $80.03 (£39.59) on Thursday, before adding a further 37 cents in early trading on Friday.

The price of US crude for November delivery rose by $2.58 on Thursday and gained another 36 cents in Friday's Asian trading to reach $83.24 a barrel - just short of the record close figure of $83.32 set last week.

Heating oil futures also rose sharply, gaining 3.2 per cent during Thursday's trading in New York.