Oil moves higher with gold after Bhutto killing
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By Jane MerrimanLONDON (Reuters) - Oil moved higher on Thursday alongside gold, which rose after Pakistani opposition leader Benazir Bhutto was killed in a gun and bomb attack.U.S. light sweet crude for February was 47 cents up at $96.44 a barrel by 9:09 a.m. EST, after touching a one-month peak of $96.54 on Wednesday, within $3.00 of its all-time high of $99.29 reached on November 21.London Brent crude rose 32 cents to $94.26 a barrel.Bhutto was killed after a rally in the Pakistani city of Rawalpindi.Gold, a traditional safe haven, rose after Bhutto's killing."I think it's a major factor, gold running does pull crude with it, but I'm not sure for how long," said one oil trader.Oil had surged to one-month highs in the previous session following Turkey's raid on Kurdish guerrilla targets in northern Iraq."The Turkish bombing of Kurdish guerrilla targets helped it on its way yesterday," said Kevin Blemkin, oil broker at MF Global. He said this had reminded the market of potential risks to crude supplies in the Middle East.He predicted the weekly U.S. oil inventory data, due at 10:30 a.m. EST on Thursday, could produce some exaggerated price moves as trading volume is thin in the aftermath of Christmas holidays.U.S. inventory data, published a day later than normal due to the Christmas holidays, is expected to show a drop in crude stocks last week of 1 million barrels as bad weather in Texas and the Gulf slowed imports.Crude inventories are already at their lowest in nearly three years.Oil prices have risen 57 percent since the start of the year and touched a record high of $99.29 on November 21, boosted by concerns over shrinking supplies ahead of winter and the weak dollar.But the prospect of slower economic growth in top oil consumer the United States as well as forecasts for a mild winter had put a lid on prices until the latest Turkish raid.Turkey's dispute with the Kurdish separatists poses little immediate threat to Iraq's main oil exports via its southern terminals, but the instability adds an element of risk to regional flows, analysts say."Whenever there's any regional tension that flares up into actual activity or incidents, you do get a risk premium factored into oil prices," said Moore.The Turkish military said its offensive against outlawed separatist Kurdistan Workers Party (PKK) guerrillas inside Turkey and across the border in northern Iraq would continue.(Additional reporting by Jonathan Leff, Editing by Peter Blackburn) (c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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