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Oil Rebounds After Sharp Drop on Bomb Plot - ASHARQ AL-AWSAT English Archive
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LONDON (Reuters) – Oil edged higher on Friday after the previous session’s 3 percent dive, as the initial impact faded of an attempted transatlantic aircraft bomb plot, which traders fear could sap oil demand and consumer confidence.

U.S. light, sweet crude oil rose 70 cents to $74.70 a barrel by 1005 GMT, recovering from the $2.35 slump on Thursday. London Brent crude jumped 78 cents to $76.06.

Crude and gasoline prices plummeted on Thursday on fears that travelers might shun airlines after Britain said they stopped the plot just days before its execution.

“By today we know that there were no following threats to attempt attacks,” said Dariusz Kowalczyk, Chief Investment Strategist at CFC Securities in Hong Kong.

“That security commissions handled the whole situation well gives hope that actual consumer confidence will not be affected.”

Airlines said flights were returning to normal on Friday but warned of more cancellations and further delays at UK airports after the foiled bomb plot stranded thousands of passengers.

U.S. unleaded gasoline futures settled at below $2.00 per gallon for the first time since June 21 on Thursday, before recovering 6.01 cents to $2.0490 on Friday.

Concern over a prolonged outage at Alaska’s Prudhoe Bay oilfield continued to support prices, although the U.S. government said BP Plc (BP.L) could continue to pump oil from the western half of the development as it repairs corroded pipes on the eastern side.

The oil major reiterated it would decide only next week whether to do so. A total of 280,000 barrels per day (bpd) of production is now shut in on the eastern flank, BP said on Thursday.

BP began shutting the 400,000 bpd Prudhoe Bay oilfield, which accounts for 8 percent of U.S. production, on Sunday due to a corroded pipe, but has been working to keep some output flowing from the west, where damage is less severe.

“The Alaskan situation is still not totally clear and then we have all of the other bullish geopolitical risks,” Tony Nunan, Assistant Manager of Risk Management at Mitsubishi Corp, said, referring to the overnight fall factors in crude.

Oil traders are also watching for any progress toward ending the four-week fighting between Israel and Hizbollah in Lebanon after key U.N. Security Council members failed to reach a deal.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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