World oil prices hit a new high yesterday above $99 a barrel, but just failed to break through the key $100 level. In another frantic day of trading, dealers pushed US light crude futures to a fresh peak of $99.29 a barrel, less than $2 below their record high, in inflation-adjusted terms, reached in 1980 after the Iranian revolution.
Trading was nervous ahead of weekly oil stock data in the US, which consumes a quarter of the world's oil. The data showed an unexpected fall in inventories, but at a key mid-western terminal at Cushing, Oklahoma, there was the first rise in stocks for several weeks, which prevented the price from pushing up through $100.
"It is two steps forward, then one back in terms of this week's inventory cushion," said Tim Evans, an analyst at Citigroup.
"Not exciting enough to get us over the hump just yet," concurred Phil Flynn, an analyst at Alaron Trading.
Later in the day US futures fell back to just over $97 a barrel, with Brent crude down to $94.49 in London trading after hitting a record high of $96.53. But Ray Carbone, of Paramount Options, said reaching $100 a barrel had become inevitable. "I think it's when not if," he said. "Pinning it on a particular day is very difficult. It was in reach last night [Tuesday] and it could easily be in reach on Friday."
The American Nymex market will be closed today for Thanksgiving and only be open for a limited session on Friday, so dealers think there is potential for it to hit $100 then.
Oil has been pushed up, like other commodities, by a strong world economy and restricted supply, although oil producers' cartel Opec blames "speculators" for the rise in prices, which has seen them increase from around $70 a barrel as recently as August. Prices have risen about $6 a barrel this week in extremely volatile markets. There are concerns about diminishing oil stocks in many countries as the northern hemisphere goes into winter.
"We've got tight supplies, a weak dollar and geopolitical tensions," said Mike Fitzpatrick, of MF Global in New York, referring to worries about deteriorating relations between the US and Iran, a major oil producer.
Motorists in the UK have suffered as the average petrol price at the pump has moved beyond the £1 a litre mark. But the pain has not been as bad as in the US because the dollar, in which oil is priced, has been weakening against the pound.
The rise and rise of oil prices this year has led to growing speculation that supplies are starting to run out.
Via: The Guardian |Ashley Seager and Andrew Clark
Tags:
