NEW YORK, 21 February 2008 — New York oil prices crossed $101 for the first time, hitting a record $101.27 at 1913 GMT, as speculators piled into a strong market rally. Yesterday, Brent North Sea crude for April delivery shed 72 cents to $97.84, after striking a record $98.70 overnight.
Prices have soared amid growing speculation that OPEC, which supplies about 40 percent of the world’s oil, may cut output at its March 5 meeting in Vienna, anticipating a fall in demand on the end of the northern hemisphere winter and a likely US economic slowdown, analysts said.
“Supply worries and comments by some OPEC members that the group might not raise output at their March meeting provided the catalyst for the sharp rally,” said Barclays Capital analyst Kevin Norrish.
Prior to yesterday’s new record, prices had traded in negative territory as many dealers opted to take profits following an overnight surge.
Earlier this month OPEC left its official daily output ceiling at 29.67 million barrels of oil, resisting calls from US President George W. Bush to increase supplies to help bring down prices.
The price of New York crude had struck a then-record high of $100.09 at the start of January. Another major factor currently supporting prices was the ongoing row between oil-rich Venezuela and US energy giant ExxonMobil, the world’s biggest oil company.
World share prices tumbled yesterday. The London FTSE index of leading shares was down 1.23 percent at 5,893.60 points at the close. In Paris, the CAC 40 index fell 1.49 percent to 4,812.81 points and in Frankfurt the DAX shed 1.47 percent to 6,899.68 points. On Wall Street, the Dow Jones Industrial Average was down 0.57 percent at 12,267.37 in midday trade. The tech-laden NASDAQ composite declined 0.35 percent to 2,298.17 while the Standard & Poor’s 500 index dipped 0.49 percent to 1,342.18.