Oil prices reach record levels

The US light crude price peaked at $46.95 per barrel today, reaching a new record high in the 21-year history of the oil futures trading at the New York Mercantile Exchange, before closing at $46.75 per barrel. Oil prices have reached new record high levels everyday since June 30 this year, with the exception of one day. London Brent crude oil futures contract closed at $42.99 per barrel today. According to media reports, the increase in oil prices is likely to have been driven by the announcement today of strengthening economic figures in the US. The US government data for consumer prices released today indicated strengthening economic figures and under-control inflation, leading to concerns surrounding the inadequacy of oil production capacity to meet global demand, informs New Ratings. According to the Street, in Russia, there were new developments in the high-stakes tax battle between the government and the nation's biggest oil company, Yukos, a tug-of-war drama that has sparked frequent concerns for its potential to slow exports. The government reportedly rejected the company's latest proposal to settle the matter, according to The Associated Press. Earlier in the day, Russian Railways reportedly said it would continue to ship the company's oil. One potential supply worry was erased Sunday in Venezuela, where voters rejected a referendum seeking the recall of controversial President Hugo Chavez, easing concerns about possible civil unrest in Latin America's largest producer. Traders also continued to pay attention to Saudi Arabia, which warned again Monday that it is prepared to use remaining excess capacity to cool price speculation. The kingdom is the world's largest oil exporter. Exports from Iraq, however, remained at about half their normal rate, in the wake of the most recent sabotage attacks on the country's production and pipeline facilities. But new violence Tuesday kept the pressure on. Reuters observes the situation and specify that oil traders remain edgy over the targeting of Iraq's oil infrastructure by Shi'ite militia fighting U.S. forces. Insurgents set fire to an oil well in southern Iraq on Monday. Iraqi oil exports have been running at 900,000 barrel per day, about half the normal rate, after saboteurs blew up a pipeline eight days ago. OPEC power Saudi Arabia said on Monday it was pumping as much as possible to bring prices down to $25-$30 a barrel. Extra Saudi crude should help build oil inventories ahead of the peak winter demand season. Attention is shifting to the U.S. Energy Information Administration inventory data for the week ended August 13, due to be published on Wednesday. A Reuters survey of eight analysts forecasts a one-million barrel fall in commercial U.S. crude stocks. In the week to August 6 crude stocks fell 1.9 million barrels to 298.6 million. U.S. oil demand so far this year is running at a strong growth rate of 3.5 percent, despite high prices.

The information about instability of oil prices can be find in the earlier news stories on PRAVDA.Ru.

&to=http://english.pravda.ru/economics/2003/03/26/45093.html' target=_blank>World Oil Prices Continue to Rise

&to=http://english.pravda.ru/economics/2002/10/10/38007.html' target=_blank>YUKOS Head Forecasts Fall in Oil Prices

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Author`s name: Editorial Team