>From Bloomberg ( www.bloomberg.com
Oil Rises From 14-Week Low as Georgia Conflict Threatens Supply
By Gavin Evans
Aug. 11 (Bloomberg) -- Crude oil gained in New York on concern oil supplies
from the Caspian Sea may be disrupted should the conflict in Georgia escalate.
Oil rose from a 14-week low as fighting in the central European state entered a
fifth day. Russian jets fired more than 50 missiles at the BP Plc-operated
Baku-Tblisi-Ceyhan oil pipeline south of the Georgian capital of Tbilisi, the
Daily Telegraph reported yesterday. There were no visible signs of damage to
the pipeline, the newspaper reported.
``Whether we get an actual physical disruption in supply to Europe, that will
be the critical thing,'' said Gerard Burg, energy and minerals economist at
National Australia Bank Ltd. in Melbourne. ``If it impacts on Brent, it is
going to affect a much wider market and has the potential to send prices
higher.''
Crude oil for September delivery rose as much as $1.30, or 1.1 percent, to
$116.50 a barrel in after-hours electronic trading on the New York Mercantile
Exchange. It was at $115.99 at 7:58 a.m. in Singapore.
Brent crude for September settlement rose 92 cents, or 0.8 percent, to $114.25
on the ICE Futures Europe exchange the same time.
Russian troops entered the breakaway province of South Ossetia on Aug. 8 after
fighting between local forces and the Georgian army. Georgia, which has
withdrawn its forces, is now under attack from warplanes and artillery fire
from neighboring Abkhazia province.
Baku Pipelines
The Baku-Tblisi-Ceyhan pipeline was shut Aug. 5 after a blast on part of the
line in eastern Turkey. The pipeline had been delivering about 800,000 barrels
of oil a day to the Turkish port of Ceyhan before the shutdown, BP said last
week.
Crude oil deliveries on the Baku-Supsa pipeline to Georgia's Black Sea coast
are unchanged from last week, BP Plc said yesterday.
Unless supplies are stopped or the conflict escalates, oil prices may come
under pressure from the rising U.S. dollar and a more ``bearish mood'' toward
most commodities, National Australia's Burg said.
New York oil futures fell 4 percent to settle at $115.20 on Aug. 8, after a
plunge in the euro reduced the investment appeal of commodities. Gold, copper
and grains also fell as weaker growth prospects in Europe reduced the
likelihood of rate increases there and delivered the dollar its biggest gain
against the euro since September, 2001.
The euro fell for a fourth day today, trading as low as $1.4911 in early Asian
trading. It was last at $1.4950 from $1.5005 in late New York trading last
week.
New York oil futures traded as low as $114.62 on Aug. 8, dropping below the
$116.76 level that marks a 50 percent retracement of the climb in prices from
February to July's record $147.27 a barrel. Some traders use the Fibonacci
analysis to suggest prices that may encourage investors to buy or sell a
commodity.
``It fell very heavily,'' Burg said. ``You can often see a little bit of a
rebound in those situations.''
