Oil market gets the jitters after Russians close Belarus pipeline

Oil market gets the jitters after Russians close Belarus pipeline
http://news.independent.co.uk/business/news/article2137733.ece

By Michael Harrison, Business Editor
Published: 09 January 2007
Oil markets reacted nervously yesterday to Russia's shock move to halt supplies to Belarus in what appeared to be a carbon copy of its dispute with Ukraine exactly a year ago.

Crude prices initially rose by more than a dollar to nearly $57 before falling back later in the day to close slightly lower at $55.47 as dealers gained comfort from the abnormally mild weather in the US which has reduced domestic American demand and pressure on US inventories.

The price of oil has fallen by more than $5 since the start of the year despite an announcement from Opec that it intends to cut production from the start of next month. But the latest flare-up between Russia and one of its near neighbours will raise fears once again over market instability and the security of supplies to western Europe.

The 2,500-mile Druzhba pipeline, which was shut down yesterday because of the pricing dispute between its Russian operator Transneft and Belarus, carries about one-fifth of Russia's oil exports to Europe and is a major source of supply to countries such as Germany, Poland, Slovakia and the Czech Republic.

http://news.independent.co.uk/business/news/article2137733.ece

They could make a major move if they wanted.