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NEW YORK -- Crude oil prices on the New York Mercantile Exchange hit a new intraday high yesterday -- $89 a barrel -- caused by geopolitical actions by Turkey authorizing military action in Iraq, despite a government report that showed inventory growth, CNNMoney.com reported.
The price for light, sweet crude for November delivery eclipsed Tuesday's record trading high of $88.20, reaching $89 a barrel before retreating, the report stated. Prices further retreated after a report by the Energy Department's Energy Information Administration, which showed inventories grew, then rebounded.
But the report was not enough to offset global concerns. Tensions between Turkey and Kurdish separatists in northern Iraq continued to support higher crude prices, with Turkey authorizing its military to stage an invasion into Iraq to fight Kurdish rebels, according to the report.
The concern is that conflict along the Turkey-Iraq border could disrupt oil supplies in the region and force crude oil prices higher, Phil Flynn, senior market analyst at Alaron Trading in Chicago, told CNNMoney.com.
On the domestic front, an explosion at an ExxonMobil refinery in Montana furthered the growing concerns over the adequacy of fuel supplies, the report stated.
Despite recent gains in crude oil prices, oil is still cheaper than the $95 a barrel or so it would have been in the early 1980s, when adjusted for inflation, according to the report.
Meanwhile, the high price of oil has come under the scrutiny of the Foundation for Taxpayer and Consumer Rights (FTCR), which claimed the run-up in prices without a reflection in prices at the pump "spotlights the profiteering of the spring gasoline price highs and the increasing politicization of gasoline pricing," the organization stated.
The FTCR stated that with the oil industry's claim that high gas prices were related to the cost of crude oil, consumers would be paying nearly $4.50 per gallon at the current prices for crude oil.
"If crude oil prices were the real driver of gasoline prices, we'd be paying $4.50 a gallon for gasoline today, based on the $3.25 that drivers were paying back in May," Judy Dugan, research director of FTCR, said in a statement. "Of course, those record prices in the spring were not tied to the price of crude oil either."
"There is no way left to connect the price of gasoline to the price of oil," added Dugan. "The key factor is what amount of refining profit the oil companies are willing to seek, and for what reasons."