Oil jumps higher, ending 3-day decline

August 7, 2008 1:38:59 PM PDT
Crude oil futures prices ended higher on the New York Mercantile Exchange, halting a steep three-day slide. The near-month contract for the benchmark grade rose $1.44 -- closing at $120.02 a barrel. Oil prices jumped back above $120 a barrel after Kurdish rebels claimed responsibility for a fire at key Turkish pipeline that supplies Western countries.

Crude had tumbled more than $6 over the previous three days, bringing prices $30 lower than its July high of more than $147 a barrel. But the contract rebounded after a pro-Kurdish news agency (Firat) said the separatist group Kurdistan Workers' Party, known as PKK, admitted sabotaging the Turkish section of the critical pipeline Tuesday night.

Turkey's state-run Anatolia news agency reported the fire under control but said it could cause the pipeline to be shut down for up to 15 days, stoking supply worries among oil market traders.