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After weeks of threatening to break records, oil prices in New York hit new highs on Wednesday.
As the US government released data that pointed towards a potential shortfall in supply, the price of a barrel of crude in New York rocketed to 78.77 usd.
There had been hope that refinery restarts and the end of the summer driving season in the United States would drag prices lower. However, government data showed that crude stocks felly by 6.5 million barrels recently, pushing up prices sharply on Wednesday.
The price of a barrel of crude in New York later fell back to 78.31, below last summer’s record highes of 78.40.
Wednesday’s spike increases pressure on OPEC to raise its output when it meets in Vienna on September 11. The cartel, which maintains that it wants the price of a barrel to fall back to around the 65 usd mark, has been sending mixed messages as to whether it will increase output.
Meanwhile, in London the price of a barrel of crude fell back 46 cents to 76.63 usd, well off prices on the other side of the Atlantic.
There were also indications from the United States on Wednesday that refinery utilisation rates there are on the up, which would suggest that current highs will not be sustained. However, recent political tensions in Nigeria could come into play in the coming weeks.
While prices have already risen by about 10 usd in the last month the general consensus is that the current highs will not last, especially if OPEC succumbs to demands for increased production next month.
And the demands for the cartel to raise production levels were not long coming on Wednesday.
Claude Mandil, head of the International Energy Agency, reiterated calls for a hike in production.
He said that oil price levels will depend on the “reaction of producer companies” in coming weeks and warned of a high possibility of limited stocks.
22:27
Posted on Aug-02-2007
