Market Watch: Oil prices jump on Mideast tensions

By OGJ editors
HOUSTON, Apr. 2 -- Crude oil prices Monday rose to their highest level since Sept. 20, 2001, upon concerns that growing Arab anger over the worsening Israeli-Palestinian violence could spread into other parts of the Middle East, possibly disrupting oil supplies. In the meantime, Iraq has resurrected a call for Arab nations to resort to a possible oil embargo against supporters of Israel in order to influence the conflict.

Although most traders said they believed there was no immediate threat of a disruption of oil supplies from the Middle East, they were concerned that other countries might become involved unless the violence stops.

Arab protests against Israel escalated Monday. Israeli soldiers have confined Palestinian Leader Yasser Arafat to his official compound since Friday. Israel Prime Minister Ariel Sharon proposed Tuesday that European diplomats fly Arafat into exile.

Israel attacked Arafat's compound in response to deadly suicide bombings by Palestinians in Israel last week. The suicide bombings continued through the weekend.

The May contract for benchmark light, sweet crudes rose by 57¢ to $26.88/bbl while the June contract rose by 64¢ to $27.01/bbl. In after-hours electronic trading, May delivery brought $26.97/bbl.

Refined petroleum products also closed higher. Heating oil for May delivery rose by 1.36¢ to 68.69¢/gal during the regular NYMEX session Monday. Unleaded gasoline for the same month jumped by 1.64¢ to 84.90¢/gal. The May natural gas contract surged by 24.80¢ to $3.53/Mcf.

Meanwhile, the London markets were closed Monday because of a holiday.