Oil moved back above $83 a barrel on Friday, within sight of all-time highs, on mounting tensions between Turkey and northern Iraq.
Prices jumped after Turkish PKK rebels said they would move back into Turkey from northern Iraq, highlighting tensions in a region that pumps a third of the world's oil.
U.S. crude rose 42 cents to $83.50 a barrel by 8:50 a.m. EDT. The previous day it traded as high as $83.67, close to a record $83.90 struck on September 20. London Brent crude rose 23 cents to $80.38.
Rebels from the outlawed Kurdistan Workers Party (PKK), fighting for an independent homeland in southeastern Turkey, also warned they would target Turkey's ruling AK Party and main opposition CHP.
Traders said the PKK statements had pushed prices higher.
Iraq's oil exports through Turkey have been virtually idle since the U.S.-led invasion of Iraq in March 2003 due to sabotage attacks. Most of Iraq's oil is exported from the country's south.
Small amounts of crude have been shipped through Turkey recently to world markets, but supplies remain sporadic.
Oil has held mostly above $80 a barrel for the past month, reflecting worries about shrinking fuel supplies that on Thursday sent U.S. heating oil prices to a new peak.
(Reuters)