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Threats to oil supplies shoot up prices
12 Jul '08
2 min read
Crude oil prices surged by US $5 to hit a new record of above $147 a barrel yesterday due to threats of low supplies from Iran and Nigeria and a possible strike by Brazilian oil workers next week.
US crude rose $2.15 to settle at $143.80 after touching an all-time high of $147.27 earlier in the day. Prices have mounted by more than $10 in just two sessions rising by $5.60 or 4 percent a barrel on Thursday. London Brent crude also went up by $1.32 to reach $143.55 a barrel after hitting $145.80 for a short while.
Experts believe that erratic supplies and strengthening demand scenario is unlikely to change until after Beijing Olympics. Recent trends have show that oil prices were actually on a retreat until July 10 when fears of supply disruption, in OPEC member countries like Nigeria and Iran, resurged and led to shooting up of prices.
Oil infrastructures in Nigeria are under constant terror of rebel attacks and this has played a major role in hiking oil prices by nearly 50 percent.
Investors have switched to oil and other related commodities to hedge themselves from the impacts of global rising inflation and weakening dollar.
Moreover, workers at Petrobras, Brazil, are also planning a five day strike sometime next week which would immensely affect more than 80 percent of the daily oil yield of around 1.8 million barrels.
Ironically, oil prices have continued to rise despite efforts made by top-ranking Saudi Arabia exporters to raise production to its maximum capacity. However, no demand has been generated for the additional crude that the country has pledged to pump.
US crude rose $2.15 to settle at $143.80 after touching an all-time high of $147.27 earlier in the day. Prices have mounted by more than $10 in just two sessions rising by $5.60 or 4 percent a barrel on Thursday. London Brent crude also went up by $1.32 to reach $143.55 a barrel after hitting $145.80 for a short while.
Experts believe that erratic supplies and strengthening demand scenario is unlikely to change until after Beijing Olympics. Recent trends have show that oil prices were actually on a retreat until July 10 when fears of supply disruption, in OPEC member countries like Nigeria and Iran, resurged and led to shooting up of prices.
Oil infrastructures in Nigeria are under constant terror of rebel attacks and this has played a major role in hiking oil prices by nearly 50 percent.
Investors have switched to oil and other related commodities to hedge themselves from the impacts of global rising inflation and weakening dollar.
Moreover, workers at Petrobras, Brazil, are also planning a five day strike sometime next week which would immensely affect more than 80 percent of the daily oil yield of around 1.8 million barrels.
Ironically, oil prices have continued to rise despite efforts made by top-ranking Saudi Arabia exporters to raise production to its maximum capacity. However, no demand has been generated for the additional crude that the country has pledged to pump.
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