Crude oil rose for a second day after Israeli air strikes
in the Gaza strip raised concerns that supply from the Middle
East, the world’s largest producing region, may be disrupted.
Defense Minister Ehud Barak said Israel is fighting a “war
to the death” with Hamas, the group that controls Gaza.
Prices also advanced as China, the world’s second-biggest
energy consumer, said it will supplement its emergency oil
stockpiles while prices are low, and the United Arab Emirates
announced compliance with OPEC production cuts agreed on this
month.
“The instability in the Middle East may well push oil
prices higher,” said Rob Laughlin, a senior broker with
MF Global Ltd. in London. “China’s plans to stockpile
crude may take up some slack from the demand destruction from
the economic slowdown.”
Crude oil for February delivery rose as much as $4.49, or
12 percent, to $42.20 a barrel in electronic trading on the
New York Mercantile Exchange. It was at $40.44 at 11:10 a.m.
in London. Today’s gain pares oil’s plunge from
its $147.27 a barrel record on July 11 to 73 percent.
Hamas, the militant Islamist group that seized control of
Gaza last year, is backed by Iran and considered a terrorist
organization by the United States. Iran holds the world’s
second-largest oil reserves and sits on the narrow sea channel
through which oil from the Persian Gulf is shipped.
Futures prices fell 11 percent last week, reaching a four-
year low of $32.40 on Dec. 19.
