USA: Oil breaks $100 a barrel

Record ID: 343766

  • Title: USA: Oil breaks $100 a barrel
  • Date: 4th January 2008
  • Summary: UNKNOWN LOCATION (FILE) (REUTERS) MAN PUMPING GAS INTO HIS SUV WORKER PUMPING HOME HEATING OIL
  • Embargoed: 19th January 2008 12:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Industry
  • Reuters ID: LVA2I9E3Q8C3MTX8YG9ZU7RBM5UK
  • Story Text: The price of oil climbs past $100 a barrel on Thursday and one analyst says it could go much higher.
    Oil prices broke over $100 a barrel for the first time on Thursday (January 03) after a U.S. government report showed a steep slide in crude inventories in the world's biggest energy consumer.
    U.S. crude climbed 43 cents to $100.05 a barrel by 11:40 EST (1640 GMT), breaking Wednesday's (January 02) record high of $100 even. Brent crude rose 45 cents to $98.29 a barrel.
    The price of crude is up more than 71 percent from the same time a year ago, bolstered by thinning inventory levels, soaring demand from China and other developing countries, a weak U.S. dollar, and geopolitical turmoil.
    The rise to triple digits has darkened the economic outlook in the United States, already battered by a housing crisis and credit crunch, and could threaten growth in the big energy consuming nations of the European Union.
    Ira Eckstein, the president of Area International Trading Corp said as the price of oil rises, consumers will have to make some choices. Eckstein said, "If you have x amount of dollars to spend, you have make a decision as to where you spend your money. Are you gonna fill your tank or are you going to buy a new sports jacket? I think something has to give. You know you are definitely going to fill your car up and not buy other things and that's going to have an effect in the economy overall."
    But $100 a barrel for oil could just be the beginning. Eckstein said the price of oil will likely rise higher. He said, "Even if we just have a moderate increase, world demand isn't slowing down, so you gotta figure it's going to go up 10 or 15 percent this year, at a minimal."
    Despite oil rocketing to $100, the White House said it will not open up the nation's emergency crude reserves to ease prices. The Paris-based International Energy Agency (IEA) also said it would not coordinate a release of emergency crude stocks from its 27 member states.
    Officials from the Organization of the Petroleum Exporting Countries said the group could do little to halt the rally.
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