Oil prices advanced today, moving briefly past the $40-a-barrel mark, as another round of antagonistic statements from Iraq overshadowed President Bush's decision to sell a small part of the government's oil reserves.
The November contract for light, sweet crude was up 68 cents at $39.35 per 42-gallon barrel at midday on the New York Mercantile Exchange. Earlier in the session, the contract rose to $40.10, the first time the price of oil has traded above $40.
An Iraqi threat to execute U.S. and other diplomats unless they hand over Westerners they are sheltering revived trader fears that a possible military conflict could disrupt oil supplies from Saudi Arabia.
The threat punctured the brief stability Bush's announcement had given the market. The November contract for crude fell to $37.67 in early trading before reversing course.