Geopolitical issues send crude oil prices higher

Geopolitical issues send crude oil prices higherCrude oil prices surged Thursday as the US dollar weakened and as worrying geopolitical issues took center stage.

Russia rattled sabers in response to the announcement that the United States and Poland have signed a deal that will locate part of a missile defense shield in Poland when a Russian general said that putting the defense installations there could trigger a nuclear attack by Russia.

In addition, the North Atlantic Treaty Organization said it has received a letter from Russia that announced Russia will no longer cooperate militarily with the alliance.

These events added to tensions in the region over the conflict between Georgia and Russia, especially after the US demanded that Russia depart from Georgian territory immediately.

There were also concerns that Tropical Storm Fay could re-enter the Gulf of Mexico and threaten oil facilities there, as well as worries that the Organization of Petroleum Exporting Countries might cut production quotas when it meets in early September.

October contracts for West Texas Intermediate crude added $5.67 to $121.23 per barrel on the New York Mercantile Exchange while Brent Crude for October delivery gained $5.97 to $120.33 per barrel on the ICE Futures Europe exchange in London.

Nymex September gasoline futures added 13 cents to $3.039 per gallon but at-the-pump prices for regular unleaded gasoline in the United States fell another 1.5 cents overnight to $3.702 per gallon.

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