Would someone please explain to me how Israeli Prime Minister Ariel Sharon's life-threatening stroke, can effect the price of oil ?
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Oil sharply higher
Prices climb on Middle East supply fears and higher prices for crude-related products.
January 6, 2006: 11:01 AM EST
LONDON (Reuters) - Oil jumped above $64 a barrel for a time Friday before giving back some gains over a combination of geopolitical factors and higher natural gas and distillate product prices.
U.S. February light crude climbed as high as $64.15 a barrel, and was trading up 96 cents at $63.75 a barrel by 11 a.m. ET
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U.S. crude prices have posted gains of more than $5 since late last week, led by fresh investor money flowing into the market seeking to capitalize on the strength of commodities.
"There's a variety of factors, but nothing you can point to directly to," Bill O'Grady, assistant director of market analysis for A.G. Edwards in St. Louis, told CNNMoney.com. "But I think the combination of geopolitical risks, rising natural gas prices as well as an increase in gas, heating oil and jet fuel prices are giving it (oil) a lift a today."
Other analysts said instability in West Africa and the Middle East reinforced investors' concerns that the developing world controlled a large share of the world's energy resources.
"This just rams home how much the Western world is dependent upon the 'Wild West' for its energy supplies, whether its West Africa or the Middle East or Russia," said Ian Henderson at JP Morgan Fleming in London.
In the last few weeks, there have been attacks on Nigeria's oil pipelines, a Russia-Ukraine row over natural gas prices that briefly cut European supplies, and the closure of Iraq's biggest refinery due to security threats.
Israeli Prime Minister Ariel Sharon's life-threatening stroke this week and growing concerns about Iran's nuclear intentions have also kept the market on edge.
"There has been a marked ratcheting up of geopolitical tensions this week," said Kevin Norrish, an oil analyst at Barclays Capital.
However, gains were seen limited after an increase in U.S. distillate and natural gas stocks.
Analysts attributed the distillate build and the jump of 1 billion cubic feet in stocks of natural gas -- a key utility fuel in the U.S. Northeast and Midwest -- to warmer weather seen across most of the country.
Treasury Secretary John Snow said in a television interview Friday that U.S. oil and gas inventory levels were "fairly encouraging," but high energy prices remained a concern.
Crude stocks fell by a less-than-expected 1 million barrels.
Demand for distillates fell by 10 percent to 4.017 million barrels per day (bpd) for the week ended Dec. 30 from the previous week, U.S. government data showed.
