Oil Approaches $120 a Barrel
Written by admin on April 23rd, 2008 in Trading, World Economies.
Oil prices reached new highs in Tuesdays trading which saw them approach $120 a barrel for the first time.
US light, sweet crude eased to $118.11 in Asian trading, having risen as high as $119.90 due to concerns of global supply, brought on by growing violence in key oil producing nations.
London’s Brent crude peaked at $116.75 a barrel on fears of further attacks on pipelines in Nigeria, falling output in Mexico and the continued weak dollar. Together these factors have pushed oil prices up 24% this year alone.
To add to the woes the oil producing cartel OPEC has shown itself disinclined to raise quotas to curb rising prices.
“The bulls are certainly in control of the oil market right now,” said Victor Shum, from energy consultants Pervin & Gertz.
There is also the added worry of further price rises with figures due later today expected to show further declines in weekly US petrol refineries.
Recently increased disturbances in Nigeria have pushed oil prices steadily upwards. Shell has reported that continued attacks on its pipelines have lead to a fall in supply of 169,000 barrels a day.
The attacks that are being made by anti-government rebels on the regions oil infrastructures have gradually been escalating and threatening any future investment in the oil rich area of the country.
Mexico is also reporting a drop in oil exports down 8% this year. As opposed to political unrest, these shortages are being brought on by gas fields being exhausted.
The exhaustion of natural resources is a growing problem that itself is pushing oil exploration and investment into ever more hostile environments that then become susceptible to problems similar to those being seen in Nigeria.
