Oil prices rebound above 119 dollars |
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LONDON, Aug 7, 2008 (AFP) - World oil prices rebounded on Thursday, as it was announced that a key pipeline carrying crude from Asia to the West would remain shut for about 15 days following a recent explosion.
Prices had dropped on Wednesday owing to news of a surprise jump in US crude reserves, traders said.
New York's main contract, light sweet crude for September delivery gained 98 cents to 119.56 dollars a barrel in electronic deals on Thursday.
Brent North Sea crude for September rallied 1.03 dollars to 118.03 dollars a barrel.
It was announced on Thursday that the Baku-Tbilisi-Ceyhan oil pipeline would remain shut for about 15 days after a blast had occurred in a pump at a section in eastern Turkey.
The fire that had started on Tuesday was likely to continue burning for another two days until the oil remaining in the pipe ran out, an official from Turkey's state-run oil and gas company BOTAS told Anatolia news agency.
Local authorities ruled out the possibility of sabotage, saying a fault in the system had been detected before the blast.
Separatist Kurdish rebels, who are active in eastern and southeastern Turkey, have sabotaged gas and oil pipelines as part of their 24-year armed campaign for self-rule in the region.
The BTC pipeline was inaugurated in 2006, carrying oil from the Caspian Sea fields to Turkey's Mediterranean port of Ceyhan, from where tankers transport the crude to Western markets.
Oil prices had meanwhile fallen on Wednesday after an unexpected jump in US crude reserves, but a bigger-than-expected drop in gasoline stockpiles was the other surprise element for the market.
The US Department of Energy announced in its weekly report that American crude reserves had increased by 1.7 million barrels in the week ended August 1.
The reading caught the market off guard because expectations had been for a 200,000-barrel decline.
The weekly report on reserves in the nation with the biggest energy consumption often impacts oil prices.
Motor fuel stockpiles plunged 4.4 million barrels, well beyond consensus forecasts for a drop of 1.5 million.
Traders are closely tracking the level of US gasoline stockpiles amid the ongoing peak-demand summer driving season, when many Americans take to the roads for their summer holidays.
burs/bcp/hd
Commodities-energy-oil-price
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