skunk
Aug 13, 2004, 06:36 PM
http://news.bbc.co.uk/1/hi/business/3562388.stm
Crude oil prices jump to new high
Oil prices continued to break records on Friday, driven higher by the threat of unrest in Venezuela over the weekend and of sabotage to pipelines in Iraq. A fire and explosion at a BP refinery in the US also fanned concerns about disruption to supplies. US light crude closed trading up $1.08 at a new 21 year high of $46.58, after touching $46.65. Brent crude in London also hit a record of $43.88, up $1.59.
Analysts have warned that oil may rise further, even reaching $50 a barrel. "None of the fears about supply have gone away and demand growth shows no signs of slowing," said Geoff Pyne, an oil industry analyst. "That makes it a difficult market to sell."
Maxed out
The world's thirst for oil is being driven by booming growth in China and India, as well as a recovery in the US. By the end of July, Chinese oil imports were up 40% from the same period a year earlier. The country is the world's second-largest consumer of oil; the US is the biggest.
Producers are already pumping flat out, and analysts are concerned that any serious disruption to supply could push prices even higher. Saudi Arabia said on Wednesday that it was ready to boost output by as many as 1.3 million extra barrels a day, but this had little effect on oil costs.
Even with that increase, there is very little room for manoeuvre, and many investors are betting that oil prices are set to go even higher. The referendum in Venezuela, the world's fifth-largest producer of crude, has heightened those concerns. Voters are set to decide whether President Chavez should stay in office and many observers are warning that there may be violence if Mr Chavez is defeated.
In Iraq, the threat of sabotage is still hanging over the country's oil pipelines despite the taps being turned on again.
What we have now is the perfect storm
Roger Tissot, PFC Energy
A number of other factors also are preying on investors' minds, including the spat between the Russian government and oil giant Yukos, and the tropical storm that has forced the US to trim output in the Gulf of Mexico.
Analysts said given the manifold uncertainties in the market, further price rises were likely. "What we have now is the perfect storm," said Roger Tissot, a director with PFC Energy. "Hurricanes in the Gulf of Mexico, Yukos, Iraq pipeline attacks and strong world demand keeping spare barrels rare."
"The sentiment in the market is that there are more bad things going to happen to the market than good things," said Sam Dale, bureau chief at Energy Intelligence.
Story from BBC NEWS
The oil supply situation is not going to get any better. The "quagmire" certainly hasn't helped. Is anybody really paying attention? This could get critical really quickly.
Crude oil prices jump to new high
Oil prices continued to break records on Friday, driven higher by the threat of unrest in Venezuela over the weekend and of sabotage to pipelines in Iraq. A fire and explosion at a BP refinery in the US also fanned concerns about disruption to supplies. US light crude closed trading up $1.08 at a new 21 year high of $46.58, after touching $46.65. Brent crude in London also hit a record of $43.88, up $1.59.
Analysts have warned that oil may rise further, even reaching $50 a barrel. "None of the fears about supply have gone away and demand growth shows no signs of slowing," said Geoff Pyne, an oil industry analyst. "That makes it a difficult market to sell."
Maxed out
The world's thirst for oil is being driven by booming growth in China and India, as well as a recovery in the US. By the end of July, Chinese oil imports were up 40% from the same period a year earlier. The country is the world's second-largest consumer of oil; the US is the biggest.
Producers are already pumping flat out, and analysts are concerned that any serious disruption to supply could push prices even higher. Saudi Arabia said on Wednesday that it was ready to boost output by as many as 1.3 million extra barrels a day, but this had little effect on oil costs.
Even with that increase, there is very little room for manoeuvre, and many investors are betting that oil prices are set to go even higher. The referendum in Venezuela, the world's fifth-largest producer of crude, has heightened those concerns. Voters are set to decide whether President Chavez should stay in office and many observers are warning that there may be violence if Mr Chavez is defeated.
In Iraq, the threat of sabotage is still hanging over the country's oil pipelines despite the taps being turned on again.
What we have now is the perfect storm
Roger Tissot, PFC Energy
A number of other factors also are preying on investors' minds, including the spat between the Russian government and oil giant Yukos, and the tropical storm that has forced the US to trim output in the Gulf of Mexico.
Analysts said given the manifold uncertainties in the market, further price rises were likely. "What we have now is the perfect storm," said Roger Tissot, a director with PFC Energy. "Hurricanes in the Gulf of Mexico, Yukos, Iraq pipeline attacks and strong world demand keeping spare barrels rare."
"The sentiment in the market is that there are more bad things going to happen to the market than good things," said Sam Dale, bureau chief at Energy Intelligence.
Story from BBC NEWS
The oil supply situation is not going to get any better. The "quagmire" certainly hasn't helped. Is anybody really paying attention? This could get critical really quickly.
