Oil Prices Surge to Record High
Oil prices today rose above $65 (£36) for the first time as concern over low stockpiles of petrol in the US put further pressure on the markets. US light sweet crude for September delivery was up 33 cents to a record $65.23 a barrel in Asian trade. North Sea oil also broke...
Oil prices today rose above $65 (£36) for the first time as concern over low stockpiles of petrol in the US put further pressure on the markets.
US light sweet crude for September delivery was up 33 cents to a record $65.23 a barrel in Asian trade.
North Sea oil also broke records, trading at more than $64 for the first time. The September delivery contract for Brent crude was up 45 cents at $64.44 in early trade this morning.
Oil prices have been under pressure all year because of strong economic growth in the US and Asia, especially China.
The latest impetus came when the weekly US Energy Information Administration report yesterday showed a 2.1m barrel decline in petrol stockpiles.
Combined with a series of refinery shutdowns in the US, low US stockpiles could make it difficult to meet peak summer demand as Americans take to the road for their holidays.
In addition to high demand, the markets are concerned about the security of supplies. Traders were this week rattled when the US closed its diplomatic missions in Saudi Arabia, and Britain and Australia warned of possible attacks in the kingdom, which is the world's biggest oil producer.
The standoff between the EU and Iran, another important oil producer, over Tehran's nuclear ambitions is yet another source of concern for traders.
Iran today warned that threats of UN sanctions would lead to a "path of confrontation".
While oil prices are around 46% higher than a year ago, they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980.
The high prices have driven forecourt costs in the UK to more than 90p a litre, and are a big concern for the Bank of England.
The Bank's governor, Mervyn King, yesterday said no one was certain whether they would continue rising or would fall back.
He said there were great uncertainties on both sides, but pointed out that high prices stemmed mainly from strong demand in the world economy rather than an interruption to supplies, as had been the case in both 1974 and 1979.
US light sweet crude for September delivery was up 33 cents to a record $65.23 a barrel in Asian trade.
North Sea oil also broke records, trading at more than $64 for the first time. The September delivery contract for Brent crude was up 45 cents at $64.44 in early trade this morning.
Oil prices have been under pressure all year because of strong economic growth in the US and Asia, especially China.
The latest impetus came when the weekly US Energy Information Administration report yesterday showed a 2.1m barrel decline in petrol stockpiles.
Combined with a series of refinery shutdowns in the US, low US stockpiles could make it difficult to meet peak summer demand as Americans take to the road for their holidays.
In addition to high demand, the markets are concerned about the security of supplies. Traders were this week rattled when the US closed its diplomatic missions in Saudi Arabia, and Britain and Australia warned of possible attacks in the kingdom, which is the world's biggest oil producer.
The standoff between the EU and Iran, another important oil producer, over Tehran's nuclear ambitions is yet another source of concern for traders.
Iran today warned that threats of UN sanctions would lead to a "path of confrontation".
While oil prices are around 46% higher than a year ago, they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980.
The high prices have driven forecourt costs in the UK to more than 90p a litre, and are a big concern for the Bank of England.
The Bank's governor, Mervyn King, yesterday said no one was certain whether they would continue rising or would fall back.
He said there were great uncertainties on both sides, but pointed out that high prices stemmed mainly from strong demand in the world economy rather than an interruption to supplies, as had been the case in both 1974 and 1979.
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