Oil heads for $50 in Asia trade
Oil continues to trade at record levels.
NET OIL EXPORTERS
(millions of barrels per day, 2003)
1. Saudi Arabia 8.38
2. Russia 5.81
3. Norway 3.02
4. Iran 2.48
5. UAE 2.29
6. Venezuela 2.23
Source: U.S. Department of Energy June 2004
SINGAPORE -- Oil prices have climbed to yet another peak in Asian trading Friday with the chance of the fuel hitting $50 a barrel becoming ever more likely.
Renewed violence in Najaf, Iraq and new signs of strong demand in China and India as their economies expand continue to drive the price higher.
Nymex crude oil futures struck another record at $48.90 a barrel on Friday in Singapore trading.
"It's a typical play before expiry, pulling up the contract to its highest," one trader told Reuters news service. "$50 looks realistic."
IPE Brent crude futures also surged to a fresh record in Singapore touching new record of $44.50 a barrel.
Earlier in New York, U.S. light crude reached a high of $48.20 a barrel Thursday.
The New York Mercantile Exchange contract has set record levels in all but one of the past 15 trading sessions.
In London, Brent crude was trading at $43.70 a barrel, up from Wednesday's close of $43.03.
Fierce fighting raged Thursday in Najaf as rebel Shi'ite cleric Moqtada al-Sadr defied an Iraqi government threat to attack his stronghold in a holy shrine and rejected demands that he end his uprising. (Full story)
Meanwhile, Iraq's main southern pipeline from the Basra oilfields has been shut since a sabotage attack on August 9, curbing export flows to about a million barrels daily, half normal rates, through a secondary line.
Worries about lack of spare world crude production capacity also are supporting prices.
Analysts point to recent developments in Iraq, Russia and Venezuela, however, that could help ease fears behind the 27 percent run-up in oil prices in the last six weeks.
"There are some signs that things are getting better," said Tom Bentz, a trader at BNP Paribas Futures in New York, the Associated Press reported.
"But the market is still in a very bullish mode," he added.
While oil is up more than 40 percent this year, after adjusting for inflation, prices are still below the peaks of 1981 and 1991.
Wednesday's price rally was helped by an Energy Department report that showed declines in U.S. inventories of oil and gasoline. U.S. oil demand so far this year is up 3.5 percent.
Surging demand in China, India and other emerging economies are adding to supply pressures.
China is now the world's second-largest oil consumer, and its imports are up 40 percent year-on-year to the end of July, according to recent data.
Before the latest round of violence in Najaf, Iraq had been exporting roughly 1.7 million barrels of oil per day, although volumes have fallen recently to about 900,000 barrels per day, according to a source within the Organization of Petroleum Exporting Countries who spoke on condition of anonymity.
Russian oil giant Yukos has been scrambling to pay off its $3.4 billion tax debt.
In Russia, Yukos is on the brink of bankruptcy as a result of the government's efforts to collect $3.4 billion in back taxes. (Full story)
The legal battle against Yukos, which pumps about 1.7 million barrels a day, has raised fears that productivity might suffer, although there is currently no evidence supporting this, analysts said.
In Moscow Thursday, a court will begin hearing evidence on fraud and tax evasion charges against former Yukos CEO Mikhail Khordorkhosky and ally Platon Lebedev.
The case is widely seen as a campaign by the Kremlin to punish Khodorkovsky over his political ambitions.
In Venezuela, the world's sixth-largest exporter, opposition leaders refused Wednesday to participate in an audit of the referendum that failed to oust Chavez. (Full story)
"People are still concerned over where that's heading," energy analyst Daniel Hynes at ANZ Bank in Melbourne, told the AP.
Saudi Arabia said last week it could immediately pump an additional 1.3 million barrels per day, but the comments didn't mollify markets.