Tuesday, March 14 2006 10:03 Hrs (IST) - World Time -

New York: World oil prices have shot higher on global markets as traders were unsettled by tensions in major crude producers Iran and Nigeria.

New York's main contract, light sweet crude for delivery in April, soared US$ 1.81 to close at US$ 61.77 a barrel yesterday, rebounding from a six per cent slide last week. In London, the price of Brent North Sea crude for April delivery gained US$ 1.37 to US$ 62.20 per barrel in closing deals.

"This market is like Dr Jeykll and Mr Hyde," said Tony Nunan, an energy risk manager for Mitsubishi Corporation.

"It has a very high volatility and, short-term, there are plenty of inventories. However, the big concerns are Iran and Nigeria," Nunan added.

New York prices dropped six per cent last week after official data revealed high inventories of US crude and the OPEC cartel maintained its oil production levels at a 25-year high.

But the possibility of economic sanctions on Iran related to Iran's nuclear programme and ongoing violence in Nigeria are 'increasing the risk of staying short,' said Phil Flynn, a senior analyst at Alaron Trading.

The oil market fears that Iran, the world's fourth biggest producer of crude, could halt its energy exports if threatened with economic sanctions over its disputed nuclear programme.

Iran's economy minister said yesterday he believed the international community was 'unlikely' to impose economic sanctions.