Iraq fighting pushes oil near $50
 |  Oil continues to trade at record levels. |
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| | FACT BOX | 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
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LONDON, England -- Oil prices are approaching the $50-a-barrel level as renewed violence in the Iraqi city of Najaf and strong demand in China and India fuel supply concerns.
U.S. light crude set a record $49.40 a barrel Friday before easing to $48.80, up 10 cents on the day.
Prices have set all-time records in all but one of the last 16 trading sessions and are up nearly $12, more than 30 percent, since the end of June.
In London, Brent crude also set a new record of $45.15 a barrel and at 1530 GMT was up 7 cents on the day at $44.40 a barrel.
Purnomo Yusgiantoro, president of the Organization of Petroleum Exporting Countries, said Friday he was concerned with the continuing rise in global oil prices, but the cartel had not yet seen a cost-driven increase in inflation. (Full story)
While oil is up more than 40 percent this year, after adjusting for inflation, prices are still below the peaks of 1981 and 1991.
Friday's price surge comes as fierce fighting rages in Najaf, after 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)
The fighting has compounded fears of further attacks on Iraqi oil infrastructure by insurgents who set fire Thursday to the headquarters of the state company that operates Iraq's southern oilfields, the South Oil Co. in Iraq's port city of Basra.
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 are also supporting prices.
On Wednesday, a U.S. Energy Department report showed domestic oil demand so far this year was 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.
 Russian oil giant Yukos has been scrambling to pay off its $3.4 billion tax debt. | |
In Russia, oil giant Yukos is on the brink of bankruptcy as a result of the government's efforts to collect $3.4 billion in back taxes.
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.
A court in Moscow on Thursday began hearing evidence on fraud and tax evasion charges against former Yukos CEO Mikhail Khordorkhosky and ally Platon Lebedev. (Full story)
The case is widely seen as a campaign by the Kremlin to punish Khodorkovsky over his political ambitions.
