Bolt of oil prices

Oil prices briefly bolted above $45 a barrel Thursday after the Russian oil giant Yukos said it cannot pay wages and that its output could suffer due to a court ruling that froze some of its assets. Analysts doubted that the dire picture painted by Yukos would come true, although the company's comments nevertheless reignited supply fears, coming just one day after government and industry data showed a sharp decline in U.S. oil inventories. Also on Thursday, there were reports from Iraq that saboteurs had detonated explosives on an oil pipeline near the northern city of Kirkuk. "Some of the factors that had gone out of the equation have come back," said John Kilduff, senior oil analyst at Fimat USA in New York. Light crude for October delivery jumped as high as $45.37, before retreating to $44.70, a gain of 70 cents in afternoon trading on the New York Mercantile Exchange. In the past two days, prices have risen more than 5 percent, informs Associated Press. According to Bloomberg, Crude oil rose for a second day after Russia's largest oil exporter, OAO Yukos Oil Co., said it may be forced to halt production because of a court decision freezing bank accounts. A court froze accounts at three Yukos subsidiaries and at its refineries, Yukos spokesman Alexander Shadrin said. The company has been ordered to pay $3.4 billion in taxes and penalties for 2000. Oil in New York surged to a record $49.40 a barrel on Aug. 20 on concern that shipments from Russia, Iraq and other exporters would be disrupted as global demand rises. ``The Yukos situation becomes more significant because Russia is gaining in importance, with production last month at post-Soviet highs,'' said Carl Larry, an associate director of energy futures at Barclays Capital Inc. in New York. ``We're running back up and definitely targeting $50 soon.'' Crude oil for October delivery was up 53 cents, or 1.2 percent, at $44.53 a barrel at 10:12 a.m. on the New York Mercantile Exchange. Prices were 51 percent higher than a year earlier. In London, the October Brent crude-oil futures contract was up 58 cents, or 1.4 percent, at $42.05 a barrel on the International Petroleum Exchange. Crude oil futures fell as Iraqi exports rose and Russia said it would increase production this year, extending a decline that has cut almost $8 from the price in eight sessions. Iraq is exporting 1.75 million barrels of oil from its southern fields today, approaching the year's high of 1.8 million barrels a day averaged in April. While attacks on oil facilities in southern Iraq cut exports by half for two weeks this month, sabotage of a pipeline on Sunday didn't affect shipments. ``The rapid recovery of exports flew in the face of the worries expressed after the recent attacks on the pipelines,'' said Jim Steel, director of commodity research at Refco Inc. in New York. ``A further improvement in the supply situation is likely and prices will continue to decline.'' A weekly report tomorrow from the Energy Department will probably show that U.S. crude oil stockpiles fell for a fifth straight week. Supplies probably declined by 575,000 barrels from 291.3 million in the week ended Aug. 27, according to the median of forecasts by 12 analysts before an Energy Department report tomorrow. Seven of the analysts expected a decline, three said supplies increased and two forecast that they were unchanged, publishes Boston Herald.

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