Oil prices break all records

The price of oil toyed with $50 a barrel Friday, a level often described as psychologically significant. But if there was a real-world impact of approaching that threshold, it was tough to find; analysts agreed that, whether the price was $50.50 or $49.50, it was bad news for the economy and good news for oil-market bulls. A barrel of crude oil for delivery in September fetched more than $49 Friday morning on the New York Mercantile Exchange, driven higher by a stand-off between Iraqi insurgents and U.S. forces in Najaf and the threat of sabotage at Iraqi oil facilities. Some analysts believed that, though it once seemedfar-fetched, the world slowly came to accept the idea that $50-per-barrel oil was a real possibility. Now that it's imminent, it's old news. On Wall Street, U.S. stocks traded higher, and bond prices fell. The dollar gained strength against the euro and the yen. Commodity traders were not preparing for the Rapture. "It's nothing more than a psychological spot; it's like 10,000 on the Dow," said Frank Lesh, commodity trader at Rand Financial Services in Chicago. "In reality, the markets themselves don't see anything special about that $50 level, informs CNNmoney. According to NYtimes, Oil prices reached a new high today, before retreating to close below Thursday's record level, after the Iraqi insurgency increased its pressure on the country's oil infrastructure and traders feared growing unrest might interrupt crude exports. Crude futures for September delivery traded in New York rose at one point to $49.40 a barrel, up 70 cents, the highest level since the New York Mercantile Exchange opened in 1983. But by the end of trading this afternoon, the price had dropped to $47.60 a barrel, down $1.10 from Thursday's record close of $48.70. Oil has gained 57 percent so far this year, reaching records every day but one since July 30. In Basra on Thursday night, insurgents set fire to the headquarters of Southern Oil, the company that operates Iraq's oilfields in the south. Oil exports have been cut in half, to one million barrels a day, since Aug. 8, after insurgents forced the closure of one of two pipelines in the area. The other main outlet for Iraq's oil production, a pipeline linking the country's northern oilfields to Turkey, has been repeatedly hit in the past year, forcing its partial shutdown. Before the war, Iraq's oil production hovered around 2.2 million barrels a day. The attacks on Iraq's oil infrastructure come against the backdrop of fighting between the American military and Shiite militants in the city of Najaf and in the Baghdad suburb of Sadr City. There are conflicting reports today from news agencies about whether the Iraqi police had taken control in Najaf. "The situation in Iraq has deteriorated. It's now like Murphy's Law: Everything that can go wrong, will," said Deborah White, an economist with SG Commodities in Paris. "Iraq is a war zone again." The Daily Star publishes, that rebel cleric Moqtada al-Sadr was preparing to hand over control of Najaf's main mosque to religious authorities but was still rejecting demands by the interim Iraqi government to disband his militia. "Crude oil is on the run again as violence heats up in Iraq," said brokerage Refco. "Sadr and his supporters have indicated a willingness to directly target oil production and transport, thus potentially endangering what oil there is coming out of the southern port." The fighting has compounded fears of more attacks on Iraqi oil infrastructure. Insurgents set fire Thursday to the headquarters of the state company that operates Iraq's southern oilfields, the South Oil Co. in Iraq's port city of Basra. "How can we hope for Iraqi production to come back soon if they can't even secure a small target like a building?" said Deborah White, senior economist at S.G. Commodities, of the South Oil Co. headquarters.

Read earlier news stories by PRAVDA.Ru &to=http:// english.pravda.ru/economics/2003/03/26/45093.html ' target=_blank>World Oil Prices Continue to Rise