Oil price powers British explorers

BRITAIN'S oil explorers have benefited from one of the most bullish pricing environments for two decades as the Iraq war and supply problems in Venezuela and Nigeria keep the crude prices close to $30 per barrel.

Opec's shock decision last week to shave production by 900,000 barrels a day sent Brent crude up by $1 and analysts fear the average crude price this year could be the highest since the $29.55 recorded in 1983.

Markets had expected crude prices to fall back once the Iraq conflict was over but continued guerrilla attacks on the country's oil infrastructure have wrecked hopes of bringing its output back to pre-war levels.

The firm price has led to bumper profits for the supermajors such as BP and Shell but it has also provided a windfall to smaller exploration companies, which can hedge future production in the market.

Rob Laughlin, analyst at GNI Man Financial, said: 'If you go back to the beginning of the year, we thought there would be a spike when the war began but that prices would fall as Iraq got back to normality.

'But Iraq never has got back to normality, we are still looking for a continuity of exports and there have also been problems elsewhere such as Nigeria.'

Brent climbed 22 cents to $26.86 today.