SINGAPORE, Aug 21 (Reuters) - U.S. crude futures <Clc1> rose to more than $116
a barrel on Thursday on supply concerns after Russia expressed its displeasure
over a U.S.-Poland missile shield pact. At 0123 GMT, prices climbed 84 cents to
$116.40 a barrel.
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The gains were encouraged by a report earlier in the day from Goldman Sachs,
the biggest investment bank in the commodities market, reasserting a forecast
that oil prices could hit a record $149 a barrel by the end of the year as
supply struggles to meet rising demand in Asia.
U.S. light, sweet crude [EMAIL PROTECTED] 116.57 1.01 (+0.87%)] rose 45
cents, to settle at $114.98.
London Brent crude [EMAIL PROTECTED] 115.1 0.74 (+0.65%)] rose $1.11 to
$114.36 a barrel.
The jump in oil prices reversed losses earlier in the day that had been
triggered by a U.S. government report showing the biggest weekly increase in
the crude inventories in the world's largest energy consumer since 2001, thanks
to a rebound in imports delayed by Tropical Storm Edouard.
"The news of Russia's potential response to the US-Poland missile shield is
causing crude to recover from earlier losses here,'' a New York-based crude
broker said.
Russia, the world's second largest oil producer, said Wednesday it would
respond with more than just a diplomatic protest to a deal between Poland and
the United States to base part of a U.S. missile defense system on Polish soil.
The statement described the missile shield as "one of the instruments in an
extremely dangerous bundle of American military projects involving the
one-sided development of a global missile shield system''.
The diplomatic spat with Russia added to global tensions that have underpinned
high energy prices in recent months, including a nuclear dispute between Iran
and the West and militant attacks on oil infrastructure in Nigeria.
The oil market had already been set on edge over Russia's military operations
in Georgia, which raised the threat of disruptions to pipelines through the
region.
"Geopolitical risks ranging from Russia to Iran continue to remind the market
that major supply sources remain in very hot spots of the globe,'' said Chris
Jarvis, president and senior analyst at Caprock Risk Management.
Oil prices are down more than 20 percent from peaks hit in mid-July amid
concern over slowing global demand, but they remainup about 14 percent this
year in a multiyear rally propelled by Asian economic growth.
