Oil hits fresh record high near US$44

LONDON – US oil prices struck a new record peak yesterday, climbing close to US$44 (N$264) a barrel after the United States raised its security alert to high for a possible al Qaeda attack on a top financial institution.

Dealers said the increased security threat was boosting the market, which is already worried by possible sabotage strikes on oil infrastructure in the Middle East at a time when producers are pumping close to full tilt to supply soaring oil demand. US light crude hit a peak at US$43,92 a barrel, marking a gain of 12 cents over Friday’s settlement and the highest level reached since oil futures were launched on the New York Mercantile Exchange in 1983.At 0900 GMT, US crude was down 18 cents at US$43,62 a barrel.Washington said on Sunday that intelligence signalled a possible al Qaeda attack and declared a high level threat alert on the World Bank and the International Monetary Fund, as well as the New York Stock Exchange and other financial institutions such as Citigroup and Prudential Financial .”The threat alert is bringing more confusion and uncertainty into the market,” said John Brady at ABN AMRO in New York.The head of oil giant BP Plc.forecast at the weekend that oil prices were unlikely to decline any time soon.Tony Nunan, manager at Mitsubishi Corp.’s international petroleum business in Tokyo, said any strike may ultimately bring prices down, as happened after the September 11, 2001 plane attacks on the World Trade Center and the Pentagon.US crude prices briefly spiked a couple of dollars close to US$30 a barrel following those attacks but came crashing down to the low US$20s soon after along with financial markets.”After 9/11 people were afraid and stopped travelling.They stopped consuming because of the uncertainty.If the target is in a consuming nation, you would expect an attack to affect the market to the downside,” said Nunan.Oil’s recent gains have been driven in part by concerns that financial turmoil at Russia’s YUKOS might cut exports from the world’s second-biggest supplier.YUKOS has said it could collapse by mid-August because of a freeze on its bank accounts and assets over a US$3,4 billion tax bill.Russian bailiffs have given YUKOS a month to pay the debt.Energy ministry data showed yesterday that Russian oil output hit a new post-Soviet high of 9,33 million barrels per day (bpd) in July despite concerns over YUKOS supplies.Oil dealers say any disruption to Russian exports would stretch already tight global stockpiles and leave the OPEC producers’ group with little power to counter any supply squeeze.-Nampa-ReutersUS light crude hit a peak at US$43,92 a barrel, marking a gain of 12 cents over Friday’s settlement and the highest level reached since oil futures were launched on the New York Mercantile Exchange in 1983.At 0900 GMT, US crude was down 18 cents at US$43,62 a barrel.Washington said on Sunday that intelligence signalled a possible al Qaeda attack and declared a high level threat alert on the World Bank and the International Monetary Fund, as well as the New York Stock Exchange and other financial institutions such as Citigroup and Prudential Financial .”The threat alert is bringing more confusion and uncertainty into the market,” said John Brady at ABN AMRO in New York.The head of oil giant BP Plc.forecast at the weekend that oil prices were unlikely to decline any time soon.Tony Nunan, manager at Mitsubishi Corp.’s international petroleum business in Tokyo, said any strike may ultimately bring prices down, as happened after the September 11, 2001 plane attacks on the World Trade Center and the Pentagon.US crude prices briefly spiked a couple of dollars close to US$30 a barrel following those attacks but came crashing down to the low US$20s soon after along with financial markets.”After 9/11 people were afraid and stopped travelling.They stopped consuming because of the uncertainty.If the target is in a consuming nation, you would expect an attack to affect the market to the downside,” said Nunan.Oil’s recent gains have been driven in part by concerns that financial turmoil at Russia’s YUKOS might cut exports from the world’s second-biggest supplier.YUKOS has said it could collapse by mid-August because of a freeze on its bank accounts and assets over a US$3,4 billion tax bill.Russian bailiffs have given YUKOS a month to pay the debt.Energy ministry data showed yesterday that Russian oil output hit a new post-Soviet high of 9,33 million barrels per day (bpd) in July despite concerns over YUKOS supplies.Oil dealers say any disruption to Russian exports would stretch already tight global stockpiles and leave the OPEC producers’ group with little power to counter any supply squeeze.-Nampa-Reuters