Oil prices jumped more than $1 a barrel Friday as traders bought crude in what has become a weekly fear of war breaking out in the Middle East over the weekend.
On the New York Mercantile Exchange, the U.S. benchmark West Texas Intermediate crude for November delivery ended the day $1.06 above Thursday's close at $37.99 a barrel, after having opened at $37.70 a barrel and trading as high as $38.30 a barrel. The crude lost $1.56 a barrel on the week.WTI fell $5.56 a barrel Monday and Tuesday, a 14.1 percent decrease, after what appeared to be conciliatory statements by Iraqi President Saddam Hussein and President Bush's offer to discuss Middle East issues in a Monday speech at the United Nations.
Since Iraq's Aug. 2 invasion of oil-rich Kuwait, oil traders have been going home Friday "long" in buy contracts because of fears a war might break out over the weekend and drive prices through the roof.
"Going into the weekend, people don't want to be 'short' (betting that prices will fall) because they fear something will happen over the weekend," said John Hill, oil broker and first vice president of Merrill Lynch in New York.
Although the market was "skittish, it was a boring day compared to the standards of the last few weeks," said Suzanne Pearse, a broker with Dow International Energy Corp., New York.
Adding to the uncertainty was a U.N. speech by the Iraqi ambassador, Abdul Amir al-Anbari, scheduled for Thursday night but postponed until late Friday because of the ambassador's sickness.