Oil prices rose back towards recent peaks today after two deadly explosions in Istanbul fuelled concern about the impact of global political insecurity on oil supplies.
New York crude was up 10 cents at $33.02 a barrel, within 50 cents of eight-month highs hit earlier this week. Brent crude in London was up 23 cents at $30.01 a barrel.
Today's bomb attacks killed at least 25 and injured 390, Turkish television said. Although Turkey produces little oil, traders are concerned about a tide of violence that has included bomb blasts in big OPEC oil producers Saudi Arabia and Iraq this month.
"There is a war premium of $4 to $5 in the oil price, whilst Saddam Hussein and al-Qaeda remain at large," said Mr JJ Traynor of Deutsche Bank in a research note.
Oil prices are at the strongest level since just before the US-led invasion of Iraq, after rising around 20 per cent since OPEC agreed in September to cut production by 3.5 per cent from November.
OPEC, which controls half the world's oil exports, meets on December 4th to review output policy and leading cartel officials have said that oil prices were not high enough to justify the cartel raising production. Analysts say an OPEC cutback at current prices would upset consuming nations, which fear the economic impact of rising energy costs.
Some of oil's price strength comes from concern over a possible shortfall of new gasoline blends to be introduced in parts of the United States from January 1st.
A US government reported that gasoline, distillate and heating oil stocks fell last week, offsetting a rise in crude oil inventories.
OPEC's reference crude oil price has spent the last nine days above the top end of the cartel's $22-$28 target band, and was last valued at $29.79 a barrel. The basket was above the range last month for 13 days.
Under self-imposed rules designed to keep prices in the target range, the group can consider raising output if the price continues above $28 for 20 consecutive working days. If prices stay strong, the 20th day falls on the day of OPEC's December meeting.