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LONDON -- U.S. oil prices hit new record levels above $44 a barrel Tuesday after the head of the OPEC producers' cartel said there was little the group could do to cool red-hot markets, according to Reuters.
U.S. light crude rose 42 cents to $44.24 a barrel, marking the highest level since crude futures were launched on the New York Mercantile Exchange in 1983. It later fell to trade around $44.05. London's Brent crude peaked at $40.45 a barrel, its highest since the run-up to the first Gulf War.
Oil prices have surged by more than one-third since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption.
OPEC president Purnomo Yusgiantoro said Tuesday the cartel had no spare oil on hand to dampen prices. "The oil price is very high, it's crazy. There is no additional supply," Purnomo told reporters in Jakarta. "Minister Naimi has said Saudi Arabia can increase production but they cannot do it immediately," he said, referring to Ali al-Naimi, oil minister for Saudi Arabia, the world's No. 1 exporter.
Saudi Arabia has said it would produce 9.5 million barrels per day (bpd) in August, which would be just 1 million bpd below the country's full capacity.
Purnomo's comments echoed those Monday of Algerian Oil Minister Chakib Khelil, who said OPEC had done all it could to stop this year's oil price rally. "OPEC can do nothing," Khelil told reporters in Algiers.
Bailiffs have given Russia's largest oil company, YUKOS, one month to pay back taxes, but the company said Monday that the Tax Ministry had begun an investigation into its 2002 accounts. YUKOS owes almost $7 billion in back taxes for 2000 and 2001 and analysts have said any bills for later years could bring the total toward $10 billion.
YUKOS pumps one-fifth of production in Russia, the No. 2 supplier after Saudi Arabia, but has had its bank accounts and assets frozen, raising fears that its sales may dry up at a time when global production is running close to full tilt.
The U.S. Energy Information Administration (EIA) will release its weekly oil stocks report Wednesday, which is expected to show declines in national crude and gasoline inventories, although distillate tanks are forecast to rise.