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Record-breaking oil prices have sparked widespread international
concern among consumer nations amid predictions that they could rise
perhaps as high as $200 per barrel.
World oil traded only a little below $122 per
barrel on Wednesday after concerns over supply in key producer
Nigeria helped push prices to record highs in frenzied trading,
dealers said.
Kuwaiti Oil Minister Mohammad al-Olaim last week
said the Organization of Petroleum-Exporting Countries (OPEC) may
hold an extraordinary meeting on oil prices before a scheduled
conference in September, and did not appear to rule out higher
production.
But Libya’s Acting Oil Minister Chukri Ghanem
recently indicated that OPEC, a cartel of which Kuwait and Libya are
members, could not pump more crude.
New York’s main oil futures contract, light
sweet crude for June delivery, was 21 cents lower at $121.63 in
afternoon Asian trade.
The contract closed on the New York Mercantile
Exchange on Tuesday at a record high of $121.84 after leaping to
$122.73, an all-time intra-day high.
Brent North Sea crude for June fell 15 cents to
$120.16 per barrel. The contract had earlier reached a new peak of
$120.99 before settling at a record closing high of $120.31 on
Tuesday in London.
Runaway oil prices have almost doubled in the
past year and have surged by more than $20 since the start of 2008.
Mood optimistic
David Moore, a commodity strategist at the
Commonwealth Bank of Australia in Sydney, said sentiment remained
buoyant after Tuesday’s sharp gains.
“While issues on the supply side are being
progressively resolved . . . they highlight the risks of oil
production going forward,” Moore said.
The supply disruptions in Nigeria have been
important but there have been indications they will be resolved, he
added.
Nigerian militants attacked an oil ship off the
coast of the West African country and took two persons hostage over
the weekend, a military spokesman said on Sunday.
The incident on Saturday came after an attack on
Shell oil wells and a flow station in southern Bayelsa state,
leading to a cut in the company’s output. Nigeria is Africa’s
largest oil producer.
‘Risk element’
Barclays Capital analyst Kevin Norrish said
“supply losses” are the key driver at present.
“Iran may also add a little risk element” in
the near term, Moore said.
Iran on Monday said it would reject any offer
that violates its right to the full nuclear fuel cycle after world
powers said they had prepared a new package to end a long-running
standoff over Tehran’s nuclear program.
Oil players fear the ongoing tension could
result in Iran using oil as a bargaining chip. Iran is the
second-largest producer in the OPEC cartel.
An analyst at BMO Capital Markets earlier cited
“rumors of US action against Iran circulating in the markets”
that affected oil and the dollar.
Analysts said prices have been boosted by latest
data showing the United States economy might be in better health
than expected.
Traders had feared that a severe slowdown in the
United States, the world’s biggest economy and largest energy
consumer, could affect oil demand.
-- AFP
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