Oil rises on Turkey pipeline fire

Oil rose yesterday on expectations that a one million barrel per day pipeline, that was attacked by Kurdish separatists in Turkey, could remain shut for up to two weeks.

The Baku-Tbilisi-Ceyhan oil pipeline, which pumps the more than one per cent of world supply from fields in the Azeri sector to the Turkish Mediterranean coast, was still ablaze after the Tuesday night explosion.

US crude rose 50 cents to $119.08 a barrel by 1.58 p.m. EDT (1758 GMT), rebounding from three-month lows after concerns about faltering demand in the United States and Europe helped push oil off a July 11 record of $147.27. London Brent crude traded up 29 cents to $117.29.

"The loss of supply from Azerbaijan only adds to a new layer of worry to a market that has found ways to operate with multiple layers of worry, already," said Peter Beutel, president of trading consultants Cameron Hanover.

Further support has come from ongoing supply disruptions from Opec member Nigeria from militant attacks and escalating tension between Iran and the West over Tehran's nuclear programme.