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Crude futures hit $ 70 a barrel after several hours of electronic trading late on Sunday in New York, which has been rising since last week sparked by heightened tensions over Iran's nuclear program.
The May delivery contract on the New York Mercantile Exchange (Nymex) for West Texas Inetrmediate (WTI) crude oil rose to US $ 70 a barrel, the highest level for the contract since late August last year.
Oil futures also rose on the International Oil Exchange in London, with Brent North Sea crude for June delivery at $ 71.40 a barrel by Monday.
Investors bought oil on fears of a supply shortage from Iran that is "at loggerheads" with the West over its nuclear program plan, traders said.
The uncertainty of the political situation in Nigeria, the major oil-producing country, and the declining inventory of US gasoline triggered by the start of the driving season in the country, has also been the cause of why oil prices continue to soar, they said.
New York crude was pegged at a high range of US $ 70.85 on Aug. 30 after hurricane Katrina struck oil fields along the Gulf of Mexico.
Meanwhile, oil prices in Asian trade also reached US $ 70 per barrel, which is also predicted as a result of concerns surrounding the tight US gasoline reserves and ongoing US concerns that are likely to launch military strikes against Iran's various nuclear facilities, dealers said.
The previous contract also had reached the range of US $ 70 before finally declining thin.
Market drivers are two issues – the US gasoline supply situation and problems related to Iran's nuclear program, said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore. (* / rit)