LONDON, 28 September 2004 — World oil prices raced to new record high levels close to $50 a barrel yesterday as unrest in Nigeria alarmed traders already anxious about low oil inventories.
In New York the price of light sweet crude for November delivery climbed to an all-time high point of $49.74 per barrel in electronic trading, the highest level since oil began trading on the New York market in 1983.
The contract smashed through the previous record peak of $49.40 seen on Aug. 20. Prices rose 52 cents to $49.40 a barrel in early deals.
In London the price of reference Brent North Sea crude oil for delivery in November jumped 95 cents to hit a record peak of $46.28, the highest level since the London market began trading oil in 1980.
Prices climbed 57 cents to $45.90 in late trading. Adjusted for inflation, world oil prices remain far below the levels reached in the wake of the 1979 Iranian revolution when prices surged to about $80 a barrel in today’s money. But prices have more than doubled from about $20 a barrel in New York at the start of 2002, surging by about 50 percent since the start of this year.
Oil prices soared after oil majors in Nigeria evacuated non-essential workers from the troubled Niger Delta oil region.
“The problems of Nigeria have obviously got worse over the weekend, with both Shell and Agip (a unit of ENI) evacuating non-essential workers from the south Nigerian Delta,” said Robert Laughlin, a trader at GNI-Man Financial.
“This is a major problem that we don’t need because they produce sweet crude oil. There is just not enough sweet crude oil.”
Traders were also concerned about sabotage attacks on Iraqi pipelines.
In Iraq two Iraqis were killed Monday in the premature explosion of a bomb they were planning to plant by a crucial export pipeline to Turkey, police in the northern oil center of Kirkuk said. Two pipelines, in northern and southern Iraq, carrying oil to refineries were attacked Friday, disrupting the flow of oil, officials said.
And in the United States, tropical storm Jeanne continued to cause devastation in Florida. Jeanne was expected to move further in-land through Georgia and North Carolina, swerving past refineries in Louisiana, but the Miami-based National Hurricane Center remained cautious.
With US oil inventories already at the lowest levels since February in the wake of Hurricane Ivan, any further supply disruptions would send prices soaring again, traders said.