NEW YORK, 6 August 2004 — World oil prices shot to new all-time highs yesterday on a market stunned by Russia’s withdrawal of a promised financial lifeline for oil titan Yukos.

New York’s main oil contract soared $1.58 to a record close of $44.41 a barrel, smashing the previous record of $44.34.

Brent North Sea crude shot up $1.60 to a record $41.30. Russia’s Justice Ministry said it had “recalled” an earlier decision allowing Yukos to access its current accounts to keep its operations running while paying a massive tax bill. The decision quickly reversed a slump of $1.32 on the New York crude oil price the previous day.

“Clearly the stunning reversal of the Russian government’s stance on Yukos makes people even more uncertain about supply at a time of very strong demand,” said Fimat USA market analyst Mike Fitzpatrick.

“Apparently demand is still strong enough to push prices higher.”

He declined to forecast where prices will go on a market awash with speculative money.

Oil traders took little comfort from a statement Wednesday by the Organization of Petroleum Exporting Countries that it had surplus capacity of up to 1.5 million barrels per day (bpd) immediately available.

“OPEC continues to hold, at present, a spare production capacity of around 1.0-1.5 million bpd, which would allow for an immediate additional increase in production,” OPEC President Purnomo Yusgiantoro said in a statement.

Many traders reacted with skepticism.

A few days earlier Yusgiantoro had said OPEC was powerless to boost supplies.

In any case, 1.0 million to 1.5 million barrels was hardly a major boost to global supplies, Fitzpatrick said. “It is not going to be a tidal wave of oil coming on to the market, for sure.” Fifty dollars a barrel was now a real possibility, some analysts said.

“Onward and upward as oil prices head toward 50 dollars,” analysts at Barclays Capital told clients.

“The market continues to be dominated by the potential for a severe supply crunch as global oil demand swings up toward its seasonal peak,” they said in a report.

Traders were also keeping a nervous watch on Venezuela ahead of an Aug. 15 referendum on President Hugo Chavez’s rule.

Opinion polls generally show Venezuelans would vote for Chavez to serve the remaining two years of his term, but there are fears that unrest and strike action could disrupt the country’s oil production.

“The concern over supply disruptions still remains on the forefront of traders’ minds,” Commerzbank analyst David Thomas said in London. “There are still potential supply disruptions in the Middle East due to terrorist activity, and Venezuela remains an issue in the near term. Those two issues are still leading to a substantial premium in oil prices above fundamental levels.”