Saturday, June 10 2006 12:54 Hrs (IST) - World Time -

London: Crude prices leapt yesterday (June 10, 2006)as concerns resurfaced over tensions in oil-producing nations Iran and Iraq, dealers said.

New York's main contract, light sweet crude for delivery in July, rose strongly by USD 1.20 to US$ 71.55 per barrel in pit trading.

In London, Brent North Sea crude for July delivery leapt US$ 1.29 to US$ 70.34 per barrel in electronic deals.

"Crude futures had slid on Thursday after news of the killing of al-Qaeda's chief in Iraq, Abu Musab al-Zarqawi, but serious worries remained over the volatile situation there," analysts said.

"Today, Iraqi oil sector employees came under assault as insurgents killed five people, including three oil engineers," security officials said.

"We still feel that the death of al-Qaeda's leader will not provide a solution to a country that is not only fighting insurgents, but its own people," said Sucden analyst Sam Tilley.

Zarqawi, who had allegedly orchestrated a bloody campaign of attacks and beheadings in Iraq, was killed Wednesday in an air strike near the restive city of Baquba.

Owing to persistent violence and sabotage, Iraq struggles to produce around 2.0 million barrels of oil per day, which is below the 2.5 million it produced before the US-led invasion of the country in March 2003.

"News that Iran has launched a fresh programme of uranium enrichment this week just as the West has offered it incentives to stop has also supported the market," Tilley added.