21 Aug 2008

Oil rises in price on US-Russia missile spat

7:57 am on 21 August 2008

Oil prices rose to almost $US115 a barrel on Wednesday after Russia responded angrily to a US missile agreement with Poland.

Earlier, Goldman Sachs, the biggest investment bank in the commodities market, reasserted a forecast that oil prices could hit a record $US149 a barrel by the end of the year.

US crude futures rose 45 cents to settle at $US114.98 a barrel. London Brent rose $US1.11 to $US114.36 a barrel.

Russia said on Wednesday it would respond with more than just a diplomatic protest to the deal between Poland and the United States to base part of a US missile defense system on Polish soil.

Russia is the world's second largest oil producer.

Other global tensions include a nuclear dispute between Iran and the West and attacks on oil infrastructure in Nigeria.

Russia's military operations in Georgia also raised the threat of disruptions to pipelines through the region.