Oil Prices At Record High
- U.S. Oil Strikes New Record Above $44
Tue Aug 3, 2004
LONDON (Reuters) - U.S. oil prices hit fresh record highs above $44 a
barrel on Tuesday after the head of the OPEC producers' cartel said
there was little the group could do to cool red-hot markets.
U.S. light crude (CLc1: Quote, Profile, Research) struck $44.24 a
barrel, the highest since crude futures were launched on the New York
Mercantile Exchange in 1983. It was last holding firm just below $44.
London's Brent crude (LCOc1: Quote, Profile, Research) followed suit,
scoring $40.45 a barrel, a level not seen since the run-up to the
first Gulf War when it hit an all-time high of $40.95.
"It's just up, up and away. There's no stopping it," said Edward
Meir, an analyst at Man Energy, adding some brokers believed U.S. oil
at $50 a barrel was no longer inconceivable.
Oil prices have surged by more than one-third since the end of 2003
on worries that accelerating global demand has left supplies tightly
stretched with little leeway for disruption.
OPEC President Purnomo Yusgiantoro said on Tuesday the cartel had no
spare oil to hand to dampen prices.
"The oil price is very high, it's crazy. There is no additional
supply," Purnomo told reporters in Jakarta.
"Minister Naimi has said Saudi Arabia can increase production but
they cannot do it immediately," he said, referring to Ali al-Naimi,
oil minister for Saudi Arabia, the world's No.1 exporter.
Saudi Arabia has said it would produce 9.5 million barrels per day in
August, which would be just 1 million bpd below the country's full
Purnomo's comments echoed those on Monday of Algerian Oil Minister
Chakib Khelil, who said OPEC had done all it could to stop this
year's oil price rally.
"OPEC can do nothing," Khelil told reporters in Algiers.
YUKOS WOES DEEPEN
The Russian Tax Ministry has begun an investigation into the 2002
accounts of the country's largest oil firm, YUKOS, the company said
on Monday, the latest twist in its battle against bankruptcy.
Bailiffs have given YUKOS one month to pay back taxes. YUKOS owes
almost $7 billion in back taxes for 2000 and 2001 and analysts have
said any bills for later years could bring the total toward $10
YUKOS, which pumps one fifth of Russian oil, has had its bank
accounts and assets frozen, raising fears that its sales may dry up
at a time when global production is running close to full tilt.
"If anything like that did happen, oil prices could move up $3 or $4
quite easily," Man Energy's Meir said.
Oil traders are nervous that strong demand is preventing global
stocks from building ahead of peak winter demand.
The U.S. Energy Information Administration will release its weekly
oil stocks report on Wednesday, which is expected to show declines in
national crude and gasoline inventories although distillate tanks are
forecast to rise.
The weekly report is closely monitored as a barometer for demand in
the world's biggest oil consumer.
Eight analysts surveyed by Reuters predicted the EIA would show a
300,000 barrel dip in crude stocks in the week to July 30 and a
600,000 barrel fall in gasoline inventories.
Distillate stocks, including key winter heating oil, were seen rising
by 1.4 million barrels.
© Reuters 2004. All Rights Reserved.
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