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Oil up on Mideast tension
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October 10, 2000: 6:26 a.m. ET
Saudi warning to Israel jolts market; OECD oil stocks fall in August
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LONDON (CNNfn) - Crude oil prices jumped Tuesday amid concern about potential disruption to Middle East oil supplies, after a warning by Saudi Arabia about the possible consequences of renewed Israeli military action against Lebanon and Syria raised tension in the region.
Brent crude for November delivery rose 61 cents to $31.37 Tuesday morning on London's International Petroleum Exchange. Benchmark New York Mercantile Exchange (NYMEX) November crude futures rose as high as $32.33 a barrel in Asia.
Israeli Prime Minister Ehud Barak on Monday threatened "decisive action" unless Lebanon and its political mentor Syria reined in the Iranian-backed Hizbollah group, which on Saturday captured three Israeli soldiers.
"Barak has to think before taking any step... and nobody should think that the Kingdom of Saudi Arabia and the whole Arab and Islamic nation would just watch with their hands tied," Saudi Crown Prince Abdullah said the same day.
The crown prince did not specify what action the world's largest crude oil producer would take.
Tensions between Lebanon and Israel re-emerged amid a wave of violence between Palestinians and Israelis that has killed at least 89 people, mostly Palestinians, and which threatens to jeopardize the Middle East peace process.
Also lending support to oil was an early spell of cold weather in the United States, where temperatures on Monday were 15 to 20 degrees below normal in northeastern states, the key region of the U.S.A. for consumption of heating oil.
Meantime, the International Energy Agency said oil stocks of the industrialized countries that make up the Organization for Economic Cooperation and Development fell by 400,000 barrels per day in August on increased demand for crude by-products.
Inventories fell by 14 million barrels from a month earlier to 2.569 billion barrels. That was 151 million barrels below the level reported in August 1999 and a massive 247 million barrels short of the August 1998 tally.
The IEA also said the Organization of Petroleum Exporting Countries had pumped an additional 290,000 barrels per day during September to raise output to 28.98 million barrels a day. World oil production averaged 77.4 million barrels, a rise of 380,000 barrels a day from August. 
--from staff and wire reports
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