NEW YORK, 15 July 2006 — Ignited by a flare-up in violence in the Middle East, world oil prices ended the week at record highs as prices in New York and London spiked to over $77 a barrel yesterday.
New York’s main contract, light sweet crude for delivery in August, rallied 33 cents to close at $77.03 a barrel.
However, New York prices had broached $78 in overnight electronic trading.
In London, Brent North Sea crude for August delivery settled at 77.27, up 58 cents from Thursday.
Yesterday’s gains came after oil prices smashed the 76-dollar-a-barrel barrier for the first time Thursday, and amid steep price gains in recent days as Israel mounted a military offensive across Lebanon and Hezbollah fighters fired rockets into Israel.
“We have to conclude that this will get worse before it gets better, and the possibility exists that forces may have been unleashed that may be difficult or even impossible to contain,” said John Kilduff, an energy analyst at Fimat USA.
“Market participants must now let prudence be their most influential guide; thus, there are many more reasons to buy than sell,” he said.
The run-up in oil raised concerns about inflation and the economy at large, sending stock prices tumbling. OPEC tried to reassure the market by stressing its commitment to “order and stability,” but at the same time said it “has no influence” over the geopolitical turmoil underlying yesterday’s volatility.
The group emphasized that the market is “well-supplied with crude.”
