Oil spikes above $50 as gas row escalates

New York’s main contract,light sweet crude for February,climbed 57 cents to USD 49.38.

“Russia continues to play hardball” on gas supplies,said Petromatrix analyst Olivier Jakob.

The European Union today slammed cuts in natural gas supplies to Europe as “completely unacceptable” as an energy price war raged between Russia and Ukraine.

“This situation is completely unacceptable,” said a statement from the EU’s presidency,currently held by the Czech Republic,and the bloc’s executive arm,the European Commission.

Russia has cut supplies bound for Europe via Ukraine in retaliation for Ukraine’s alleged theft of Russian gas.

Ukraine denies syphoning off Russian gas and has accused Moscow of engineering the crisis.

Oil prices had already risen sharply on Monday as the Israeli-Palestinian conflict intensified and major crude producer Iran said OPEC would hold a special meeting next month.

Crude futures have been boosted over the past week as the conflict in Gaza stokes tensions in the key oil-producing Middle East.

“The conflict in Gaza is no threat to the prompt and direct supply of oil but as the humanitarian disaster continues to intensify it could turn to have an indirect impact on oil supplies,” said Jakob.