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Oil prices hit 5-year high
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September 12, 1996: 5:50 p.m. ET
Crude prices set post-Gulf War intraday record on Iraq-U.S. tensions
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NEW YORK -- Oil prices traded at a new post-Gulf War high for a time Thursday as a nervous market braced for a possible fresh U.S. military strike against defiant Iraq.
On London's International Petroleum Exchange, Brent crude-oil futures traded as high Thursday as $24.39 a barrel -- the highest price since January 1991, during the middle of the Gulf War.
Profit taking later took prices down a bit, although oil continued trading at about $7 a barrel above its price at the same time last year.
In New York, oil for October delivery settled on the New York Mercantile Exchange at $25 a barrel, up 25 cents for the day, but shy of that market's post-Gulf War record.
Prices rallied as Washington threatened "disproportionate" American retaliation following Wednesday's Iraqi missile attack on U.S. fighter planes over northern Iraq.
Any instability in the Gulf area -- which holds nearly 70 percent of the world's oil reserves and produces about a quarter of the planet's oil supply -- tends to send petroleum prices higher.
"The market is worried about the crisis developing -- the fear of war," said Nigel Saperia, managing director of oil trading at Bankers Trust International in London.
Iraq has not legally exported oil since the United Nations placed an embargo on the nation following Saddam Hussein's 1990 invasion of Kuwait.
Baghdad could probably produce about 2 million barrels a day if a United Nations lifted the embargo, but chances of that grow slimmer by the day.
Analysts also say a U.N. plan to allow limited Iraqi exports appears to be on ice for now.
At the same time, robust world demand and shortfalls in production have helped drive oil prices higher.
"The fear factor is there, but supply-demand fundamentals are supporting a lot of these price gains," said Michael Barry of Energy Market Consultants.
From staff and wire reports.
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