Friday, March 17 2006 11:47 Hrs (IST) - World Time -

New York: World oil prices rose here with a massive US-led air assault in Iraq intensifying jitters about global supplies of crude, dealers said.

New York's main contract, light sweet crude for delivery in April, rose 1.41 dollars to close at US$ 63.58 yesterday(Mar 17,2006).

In London, the price of Brent North Sea crude for April delivery eased three cents to end at US$ 62.91 a barrel. Traders ascribed the fall to technical trade linked to the expiry of options on April contracts for oil.

The May contract for Brent finished 1.11 dollars higher at US$ 64.21 a barrel. "The market does have its ongoing concerns about Iran, the new bombing campaign in Iraq and other potential threats to supply Nigeria, Venezuela in mind as background issues," said Tim Evans at IFR Markets in New York.



But at the same time, "There is no physical shortage behind the advance", he said, ascribing the day's strength to "one of those relatively pure technical rallies".

Alaron Trading analyst Phil Flynn said two factors had dominated yesterday's trade, "Number one, the air strike in Iraq caused some traders to cover their positions, but the other issue was the expiration of the April options."

Oil prices had spent much of the day lower after the US Department of Energy (DoE) reported Wednesday a much bigger than expected rise in crude inventories.

"Some support came out early in the session from a fire at Shell's Tern Alpha North Sea platform which was forced to shut in 25,200 bpd (barrels per day)," Sucden brokers said.