Yemen tanker blast pushes up oil prices

Brent crude oil was sharply higher in early London trade after the explosion on a French tanker off Yemen, dealers said.

At 10.14 a.m. Brent crude for November delivery was up 24 cents at $28.30.

The exact cause of the blast is unclear, but terrorism is suspected.

But analysts said the initial reaction to the oil tanker explosion is probably excessive, is unlikely to have a serious or lasting impact on oil movements and will not affect shipping in the Gulf.

They said that another force pressuring prices upwards is likely to be general buying before President Bush's national address on Iraq tonight.

"He is likely to outline his reasons for his stance against Iraq in an effort to unify the American public behind his policy," one analyst said.