Further gains in oil prices were recorded in the middle of July and leading blends were quoted at their highest levels for a year, traders said.

The price of dated Brent hit $18.27 a barrel on 13 July and light crude for delivery in August traded at $20.55 a barrel on the same day. The rise in prices was mainly due to a strike by Nigerian oil workers in support of demands for the restoration of democracy.

Traders said that disruption of trade was minimal on 13 July. However, this strike prompted panic buying in the market.

Oil prices are about 40 per cent higher than they were at the start of 1994. However, the market does not expect further big price rises. Analysts say that Saudi Arabia is signalling that it is prepared to intervene to prevent oil prices rising much above $20 a barrel. The market is also expecting the resumption of at least some Iraqi crude oil export later in the year.