- Title: USA: OIL PRCE RISES AS VIOLENCE IN IRAQI CONTINUES
- Date: 20th August 2004
- Summary: (W6) NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 20, 2004) (REUTERS - ACCESS ALL) 1. WIDE OF OIL TRADERS AT THE NEW YORK MERCANTILE EXCHANGE 0.07 2. VARIOUS OF OIL TRADERS DEALING AND LOOKING AT PRICES 0.18 3. SCU (SOUNDBITE) (English) NEW YORK RESEARCH DIRECTOR FOR REFCO, JAMES STEELE, SAYING: "Fifty dollars is very high historically. We're going to see a couple of changes as a result of it. We are going to see an energy shift back to coal, back to nuclear power and back to non petroleum sources for energy." 0.37 4. PAN OF OIL TRADERS 0.47 5. VARIOUS OF TRADERS AT WORK 1.03 6. SCU (SOUNDBITE) (English) STEELE SAYING: "If it is temporary, the damage done to the world economy will be illusory and not last that long, but if it is longer we will see greater decline in GDP and, consequently, higher inflation rates and higher unemployment." 1.20 7. VARIOUS OIL TRADERS 1.34 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 4th September 2004 13:00
- Location: NEW YORK CITY, NEW YORK, UNITED STATES
- Country: USA
- Reuters ID: LVAE1JNZRUH1807IRMA44W05EJ66
- Story Text: OIl price rise driven by escalating violence in Iraq
and fuel demand from China and India.
Oil prices raced to fresh highs on Friday (August
20), carrying U.S. crude over $49 a barrel, driven by
escalating violence in Iraq and unabated fuel demand growth
from China and India.
U.S. light crude set a record $49.40 a barrel before
easing to $48.80, up 10 cents on the day. Prices have set
all-time records in all but one of the last 16 trading
sessions and are up nearly $12, more than 30 per cent,
since the end of June.
London Brent crude also set a new record of $45.15 a
barrel and at 1530 GMT was up 7 cents on the day at $44.40
James Steele, New York researcher for Refco, a
commodities brokerage, says if fears of $50 a barrel are
realised there'll be some changes in energy policy.
"Fifty dollars is very high historically. We're going
to see a couple of changes as a result of it. We are going
to see an energy shift back to coal, back to nuclear power
and back to non petroleum sources for energy," said Steele.
The push to new peaks came as U.S. warplanes pounded
militia in Najaf at the heart of a two-week-old Iraqi
Shi'ite uprising, killing at least 77 in the last 24 hours.
Confusion surrounded the fate of rebel leader, cleric
Moqtada al-Sadr, amid disputed reports that Iraqi police
had gained control of the Najaf mosque occupied by Sadr and
The fighting has compounded fears of more attacks on
Iraqi oil infrastructure. Insurgents set fire on Thursday
(August 19) to the headquarters of the state company that
operates Iraq's southern oilfields, the South Oil Co. in
Iraq's port city of Basra.
The main southern pipeline from Iraq's Basra oilfields
has been shut since a sabotage raid on August 9, curbing
exports to about a million barrels daily, half the normal
Rising oil demand has left no room among other producer
countries to cope with outages in Iraq but there is little
sign yet high prices are slowing the fuel demand that is
fed by global economic growth.
But Steele says it could be a different story if prices
remain so high.
"If it is temporary the damage done to the world
economy will be illusory and not last that long, but if it
is longer we will see greater decline in GDP, and consequently
higher inflation rates and higher
unemployment," said Steele.
International Monetary Fund Director Rodrigo Rato was
quoted on Friday saying he still expected world growth this
year of 4.6 per cent. Global oil demand growth this year is
running at a 24-year high of nearly 3 per cent.
China's oil demand shows no evidence of easing despite
a government bid to slow its economic boom. Chinese crude
imports for July jumped 41 per cent with imports for the
year to end-July up 40 per cent, new customs data showed on
India's top refiner, state-run Indian Oil Corp. Ltd.,
said it expected national crude oil imports to rise 11 per
cent in 2004/05 as demand rises nearly four per cent. An
oil ministry official said India's crude oil import bill
was expected to rise 50 per cent to $27 billion this fiscal
OPEC President Purnomo Yusgiantoro expressed concern
over the continuing price rise, but said the cartel had not
yet seen a cost-driven increase in inflation among major
The Organisation of the Petroleum Exporting Countries
said this week it had raised July output to a level that
should permit a substantial build in world oil inventories
in the fourth quarter, but the assurances have had no
impact on prices.
The cartel is pumping at its highest level since 1979.
A report from OPEC headquarters in Vienna this week
estimated it could raise production to 30.5 million barrels
per day next month from 29.57 million bpd in July.
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