World oil prices hit new records above $50 a barrel Tuesday amid fears that problems in oil-producing nations mean that oil supplies may not meet strong demand.
Prices soared as unrest is reported in Nigeria and Iraq, hurricane damage hurt some U.S. producers, and legal and political disputes cause problems for a Russian oil producer.
Saudi Oil Minister Ali al-Naimi says the kingdom will step up its ability to produce oil to 11 million barrels a day, an increase of 1.5 million barrels, says Voice of America.
According to the ABC News, producers are pumping at near full capacity to feed demand as &to=http:// english.pravda.ru/economics/2003/02/27/43798.html' target=_blank>China's economic expansion powers the fastest output growth in 24 years.
&to=http:// english.pravda.ru/accidents/2003/04/17/46001.html' target=_blank>OPEC, which controls more than half of global crude exports, is producing at its fastest rate since the late 1970s in an effort to control prices, but much of the extra crude is not of the quality best suited for transportation fuels.
European Union Energy Commissioner Loyola de Palacio said the pressure on prices would ease after the US presidential election in November.
A string of hurricanes in the oil producing Gulf of Mexico have accelerated the price rise by delaying shipments and disrupting offshore production and refinery operations.
The Americans came to realise that they would have to either leave the region or weaken their presence there. It is Russia that is filling the vacuum now