The Guardian: Oil prices surge to new high: “Today's rises came as unions in Nigeria, which accounts for around 3% of the world's oil production, began a four-day general strike over fuel prices. The action follows a two-day oil unions strike at Shell last week, as well as threats from rebels to disrupt production.” (ShellNews.net)
Adam Jay and agencies
Monday October 11, 2004
Posted 12 Oct 04
The price of London Brent crude today passed through the $50 barrier for the first time as US oil futures also hit record highs.
Brent crude reached $50.10 a barrel in morning trade on London's International Petroleum Exchange, the benchmark for Europe's imports of Middle Eastern, Russian and African crude. The figure was 39 cents up on the day, and almost $20 - or 65% - higher than at the start of the year.
Meanwhile, US light, sweet crude oil futures hit a high of $53.48 a barrel, up 17 cents. Today's rises came as unions in Nigeria, which accounts for around 3% of the world's oil production, began a four-day general strike over fuel prices. The action follows a two-day oil unions strike at Shell last week, as well as threats from rebels to disrupt production.
However, oil executives in the OPEC member country said there would not be an immediate impact on output.
Elsewhere, the Saudi oil minister, Ali al-Naimi, insisted the current price of oil was unjustified and should come down after next month's US presidential elections. "There is no justification for it to be where it is," he said. "This is a political year, and this may have some influence."
Rapid growth in world oil demand this year, led by China, has eroded spare production capacity in OPEC nations, leaving the global market little scope to cope with disruptions.
Mr al-Naimi added that Saudi Arabia, the world's biggest oil producer, could pump an extra 1.5m barrels per day if required. However, oil traders said extra supplies of the kingdom's high-sulphur crude would do little to stem rising prices.
Industrialised nations lack the hi-tech refinery capacity needed to process OPEC's low-quality crude into transportation and heating fuels, and this has forced refiners to increase bids for higher quality supply from Africa and the North Sea.
In the US, supplies remain disrupted by Hurricane Ivan, which hit offshore oil producers almost four weeks ago. Around 475,000 barrels per day of Gulf of Mexico oil production remain out of commission and, although one third of that production is likely to be resumed by the end of the month, operators say some output may be out until next year.
US supplies were again disrupted by the weather over the weekend, with tropical storm Matthew forcing the closure of the Louisiana offshore oil port. The port unloads around 900,000 barrels per day of imported oil, and 500,000 barrels per day of oil from the Gulf Mars platform.
The US treasury secretary, John Snow, said at the weekend that rising oil prices were "creating headwinds for the otherwise very strong economy".