LONDON, 18 May 2004 — Oil prices struck a new high yesterday on simmering concern that rapid fuel demand growth will outpace global supplies at a time when traders fear a sabotage attack on the Middle East oil infrastructure.
US light crude reached $41.85 a barrel, the highest price since the New York Mercantile Exchange launched the crude contract in 1983. It settled at $41.55 a barrel, up 17 cents, while London’s Brent crude ended up 5 cents at $37.91 a barrel.
“The short-term is dominated by low gasoline stocks in the United States and Europe and deterioration of the Middle East situation. Neither is likely to change much in the months to come,” said Societe Generale economist Frederic Lasserre.
Low US gasoline inventories ahead of peak demand in the summer months, a surge in global consumption driven by healthy economic growth and worries that instability in the Middle East may disrupt supplies have attracted investment hedge funds to oil in droves. Crude prices are up $9 a barrel, or 28 percent, since the end of last year.
The United States has led consumer countries’ calls on the OPEC producer group to release more supply as fears gather of inflation and a slowdown in economic growth.
OPEC, which controls half of world crude exports will convene informally later this week on the sidelines of an Amsterdam conference and again in Beirut on June 3 for a full ministerial meeting.