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SINGAPORE, Oct 17 (Reuters): Oil prices leapt $1 today as a new storm forming in the Caribbean threatened to plough into Gulf of Mexico oil platforms for a third time this year.
Rising tensions in Iran, the world's fourth-biggest oil producer, also buoyed prices after twin bombings in the southwest oil city of Ahvaz, which Tehran blamed on Britain.
US crude climbed $1.07 a barrel, or 1.7 per cent, to $63.70 in electronic trading. London Brent crude was up 98 cents to $60.46 a barrel.
Oil gained 79 cents last week when prices hit a 10-week low of $60.35 on signs high prices were cutting into consumption.
Concerns about waning demand were eclipsed Monday by Tropical Depression 24, located 155 miles (250 km) southeast of Grand Cayman, which the US National Hurricane Center said could strengthen into a named storm later in the day and move into the southeastern Gulf of Mexico by the end of this week.
"The market is nervous about a new storm, while supplies are tight and oil facilities have not fully recovered (from the last hurricanes)," said Naohiro Niimura, vice president of the derivatives business at Mizuho Corporate Bank in Tokyo.
Hurricanes Katrina and Rita tore through the Gulf and into the coast in August and September, sharply curtailing oil and gas production as well as refinery operations.
Geopolitical anxiety moved up a notch in OPEC-member Iran, where five people were killed and more than 80 wounded when homemade bombs detonated in garbage bins Saturday.
Oil traders have been on tenterhooks over Iran since the summer as Tehran's persistent pursuit of its controversial nuclear programme puts it at odds with the United States, but analysts said Washington might be reluctant to press the issue.
Fears that oil consumption growth may stall amid high prices have helped knock US crude down from its $70.85 a barrel record-high at the end of August, although prices are still up 47 per cent since January and double what they were two years ago.
Meeting in China, the G20 group of rich and developing nations said they feared "long-lasting and volatile" prices could spur inflation, slow growth and create economic instability, although some officials said the dangers were contained for now.
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