- Oil prices today hit new highs as political tensions
in the Middle East and instability in Iraq sapped confidence in the security
of supplies from the region.
-
- With high demand from China and the US also putting pressure
on energy prices, the price of US light crude rose by 10 cents to a record
$41.20 (£23.50) a barrel.
-
- It was the highest price in the 21 years since the New
York Mercantile Exchange launched the contract. London Brent stood at $38.40,
up by five cents.
-
- The rise in the price of oil - which has gone up by 25%
this year - has in part been driven by shrinking petrol stocks in the US
at a time when refiners are attempting to build up inventories ahead of
rising demand in the summer. The Memorial Day holiday weekend at the end
of May marks the traditional start of peak summer driving demand in the
US, with people beginning to go on holiday.
-
- Strong global economic growth is also putting pressure
on energy prices at a time when there are doubts that oil suppliers can
do much to boost output.
-
- Spare capacity in Opec, the oil cartel, is limited largely
to Saudi Arabia, with some spare volume also available in the United Arab
Emirates and Kuwait. The three would have to step up production significantly
for prices to cool.
-
- Opec is already pumping more than 2 million barrels a
day over agreed limits. Traders say an increase in quotas of at least 1.5
million barrels a day will do little more than formalise existing output.
-
- Saudi Arabia, which has close relations with the US,
has proposed an increase in Opec quotas, but the organisation has yet to
discuss the suggestion.
-
- Opec will decide its output policy in Beirut on June
3, having discussed options on the sidelines of a forum for petroleum producing
and consuming countries being held in Amsterdam on May 22-24.
-
- Meanwhile, exports from Russia, which is not part of
Opec, have hit a ceiling following years of growth. The world's second-largest
oil exporter cannot boost shipments unless new pipelines are built, the
head of Transneft, the oil pipeline monopoly, said.
-
- High petrol prices are a cause of acute concern for the
British government, sparking fears of a rerun of the fuel protests by farmers
and truckers that almost brought the country to a halt four years ago.
-
- The government was today holding an emergency meeting
to plan for potential petrol shortages as fuel tax protesters warned of
new disruption.
-
- The industry has predicted that the price of petrol could
reach 88p a litre, or £3.32 a gallon. On top of rising crude prices,
the Treasury is planning a 1.9p a litre increase in fuel duty in September.
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- Guardian Unlimited © Guardian Newspapers Limited
2004 http://www.guardian.co.uk/oil/story/0,11319,1217080,00.html
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