July 7, 2005

Oil off $4 after London explosions

LONDON (Reuters) - Oil prices fell $4 to below $58 a barrel
on Thursday after explosions on London's transport system
feared to be terrorist attacks.

U.S. crude by 1035 GMT was off $3.98 at $57.30 a
barrel after setting a new record high at $62.10 before the
attacks on worries about the impact on oil supply of a
hurricane in the U.S. Gulf.

Brent crude in London shed $4.10 a barrel to $55.75
after setting a high of $60.70.

London police and other British authorities said it was too
early to say what was behind the blasts across at least six
locations in central London.

But, speaking in Rome, the European Union's commissioner
for justice and security affairs said the blasts were terrorist

"We have the tragic confirmation that terrorism has once
again hit the heart of Europe and hit a country that holds the
presidency of the (European) Union and the G8," Frattini told

Dealers said that if the explosions were the result of an
attack some economic downturn might be expected, similar to
that following the September 11, 2001 attacks in the United

"If this is our 9/11 then the market will sell off very
heavily on that," said Nigel Saperia of trading house Glencore.

Earlier prices set new records on the approach of a
hurricane toward U.S. Gulf oil production and refining

Tropical Storm Dennis was upgraded on Wednesday to become
the season's first Atlantic hurricane as it moved through the
central Caribbean, putting it on track for the oil and natural
gas fields off the Gulf Coast on Sunday, the National Hurricane
Center said.