Oil prices approached $80 a barrel on the first trading day of 2010 after Russia cut crude supplies to Belarus on New Year's Eve following a price dispute. Russian oil resumed normal flows to Europe via Belarus on Monday.
AFP - Oil prices raced toward 80 dollars a barrel on the first trading day of the year Monday after Russia cut crude supplies to Belarus, analysts said.
New York's main futures contract, light sweet crude for delivery in February, rose 61 cents to 79.97 dollars a barrel.
Brent North Sea crude for February delivery gained 53 cents to 78.46 dollars.
Crude prices rose on concerns over the implications of Russia's move, which has been effective since New Year's Eve, analysts said.
"Oil is up, reacting primarily to... Russia stopping oil supplies to Belarus," said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
"That is the dominant factor... and has added some momentum to oil."
Media reports said Russia had stopped supplies to Belarus from December 31, 2009, with ongoing negotiations to restart deliveries hampered by tariff disagreements.
The incident is the latest in the energy dispute between the two nations over tariff arrangements. Moscow also severed supplies to Belarus in January 2007 following a similar row.
An analyst quoted by the Financial Times said the pipeline through Belarus supplied up to 800,000 barrels of oil products a day to Germany and Poland.
However, oil exports to Europe were still flowing despite the Russian move, with refineries in Belarus holding a week's worth of stockpiles, media reports said.
Date created : 2010-01-04