LONDON, 19 August 2004 — World oil prices smashed through $47 a barrel for the first time yesterday amid worries about supply threats in Iraq and Russia and a drop in US crude oil inventories. New York’s benchmark contract, light sweet crude for delivery in September, reached a new record of $47.35 a barrel in early deals.
“There are still so many potential disruptions to supply, in a very, very tight market ... I think it is a matter of when and not if we reach $50,” Investec analyst Bruce Evers said.
The main New York contract later pared gains to stand up 10 cents at $46.85 a barrel.
Meanwhile in London the price of Brent North Sea crude oil for delivery in October dropped 24 cents to $42.75 per barrel in late afternoon deals.
Markets were also digesting US government figures showing that crude oil inventories in the week to Aug. 13 dropped 1.3 million barrels to 293.0 million. Gasoline stocks declined 2.6 million barrels to 205.7 million.
OPEC meanwhile said that the organization’s oil production will be more than enough to cover demand at the end of this year and in 2005.
Output by the Organization of Petroleum Exporting Countries should reach 30 million barrels per day this month, and could increase to 30.5 million in September, its monthly report said.
The organization also upgraded its forecast for oil demand this year by 280,000 barrels per day to 81.18 million bpd. Also supporting prices yesterday was the saga surrounding embattled Russian oil titan Yukos, reportedly in the process of selling a 56-percent stake in a Siberian natural gas company in a bid to pay off its crushing tax bill.
High oil prices have given a boost to oil production stocks like Exxon Mobil Corp. and ConocoPhillips but weighed on other sectors.
