Tense oil market falls deaf to Saudi promises

PARIS – Record oil prices last week, the result of “irrational exuberance” in the IEA’s eyes, reflect worries about global production that not even Saudi Arabian promises to pump more crude were able to brush away.

With extremely firm demand, caused in large part by China’s booming economy, the global oil supply is currently dogged by the conjuncture of different supply problems in key producing countries, driving the market into a frenzy. On Friday, New York’s benchmark light sweet crude for delivery in September leapt US$1,08 (N$6,48) to a record high settlement of US$46,58 a barrel.It spiked at an all-time high US$46,65.London’s Brent North Sea crude oil for September soared US$1,59 to a record finish of US$43,88 a barrel after hitting an all-time high of US$43,92.With nothing seeming to hold back oil prices, the International Energy Agency (IEA), which represents the interests of major oil consumers, made an appeal to the market for calm.”The market is tight, production and infrastructure capacity is less than desired and uncertainties continue to weigh on the market.But, does this justify 45-dollar (per barrel) oil? Current oil prices are a concern and are causing economic damage,” it said in its monthly oil market report published Wednesday.And yet the IEA’s statements, which are usually taken seriously by oil traders, fell on deaf ears in the market, where all eyes were focused on the chaotic environment — the Yukos saga in Russia, violence in Iraq and the run-up to yesterday’s referendum in Venezuela.- Nampa-AFPOn Friday, New York’s benchmark light sweet crude for delivery in September leapt US$1,08 (N$6,48) to a record high settlement of US$46,58 a barrel.It spiked at an all-time high US$46,65.London’s Brent North Sea crude oil for September soared US$1,59 to a record finish of US$43,88 a barrel after hitting an all-time high of US$43,92.With nothing seeming to hold back oil prices, the International Energy Agency (IEA), which represents the interests of major oil consumers, made an appeal to the market for calm.”The market is tight, production and infrastructure capacity is less than desired and uncertainties continue to weigh on the market.But, does this justify 45-dollar (per barrel) oil? Current oil prices are a concern and are causing economic damage,” it said in its monthly oil market report published Wednesday.And yet the IEA’s statements, which are usually taken seriously by oil traders, fell on deaf ears in the market, where all eyes were focused on the chaotic environment — the Yukos saga in Russia, violence in Iraq and the run-up to yesterday’s referendum in Venezuela.- Nampa-AFP