Oil prices broke briefly above $20 today on escalating violence rocking the Middle East and hopes that Russia and OPEC would cut a deal to restrain output.
International benchmark Brent crude futures for January delivery were last trading 19 cents stronger at $19.90 a barrel after hitting a high of $20.04. US light crude gained 26 cents to $20.35.
Brent crude futures touched a 29-month low of $16.65 on November 19th after OPEC said it would not cut production if non-OPEC countries did not make similar reductions.
Crude oil traded at a high of $27.45 just before the September 11th attacks on the United States.
Today's price spike came as Israeli aircraft continued to pound Palestian targets in retaliation for recent suicide bombings inside the Jewish state.
Although such violence does not directly impact crude oil supplies, dealers worry that major oil-producing countries in the Gulf could be dragged into the conflict.
OPEC has said it will cut output by 1.5 million barrels per day (bod) only on condition that non-OPEC countries remove 500,000 bpd from the market.
Russia, the key to a comprehensive deal, has disappointed OPEC by so far only offering to cut a token 50,000 bpd.