Oil Near $106

Oil jumped above $107 on Thursday after saboteurs blew up one of Iraq's two main export pipelines.

The attack on the pipeline in southern Iraq came on the third day of an Iraqi military operation against fighters loyal to Shi'ite cleric Moqtada al-Sadr in the oil port of Basra.

"This morning saboteurs blew up the pipeline transporting crude from Zubair 1 by placing bombs beneath it. The pipeline was severely damaged," a Southern Oil Company official told Reuters.

Iraq exported 1.54 million barrels per day from Basra in February.

U.S. light crude for May delivery rose as high as $107.70 a barrel and it was up $1.30 at $107.20 a barrel by 4:58 a.m. EDT. London Brent crude rose $1.19 to $105.18.

On Wednesday, U.S. crude prices had registered their biggest one day percentage gains after U.S. government data showed a larger than expected falls in fuel stocks.

Crude oil inventories were unchanged last week, against expectations for an increase of 1.7 million barrels.

TradingEconomics.com, Reuters
3/27/2008 6:37:53 AM