Oil Prices Rise Sharply After Bush’s Warning

Oil prices rose sharply today as traders reacted to news that President Bush left Egypt warning that the world was losing patience with Iraq’s refusal to withdraw from Kuwait.

Crude oil for January delivery shot up $1.65 to $31.28 a barrel in New York, where prices for refined products also rose.

Sharply higher prices in Europe today and Thursday’s news that Britain would send additional troops and aircraft to the Persian Gulf also fueled the rise, traders said. The U.S. markets were closed Thursday for the Thanksgiving holiday.

Prices rose modestly in London on Thursday and in New York on Wednesday.

After visiting U.S. troops in Saudi Arabia for the holiday, Bush stopped in Egypt today as he neared the end of an eight-day trip to Europe and the Middle East.

“We’re getting tired of the status quo and so is the rest of the world,” he told a news conference after two hours of talks with Egyptian President Hosni Mubarak.

Traders reacted to the hawkish comments by bidding up oil prices, buying in case a shooting war erupts and supplies are disrupted.

“The fact that Bush is running around the gulf, trying to gather support for a U.N. resolution to use force, is making people nervous,” said Evan Barron, a trader at Merrill Lynch.