The Guardian: Oil hits record $54 a barrel: “Supply fears were again blamed for the upward pressure as Nigeria was beset by a national strike and the Russian justice department finally put the axe into Yukos, saying it would sell off part of the oil group's business.”: “Oil firms are using their rising income to search for new supplies. Shell was also reported yesterday to have put its stake in the InterGen power business up for sale to raise cash for more exploration.” (ShellNews.net)
Terry Macalister
Wednesday October 13, 2004
The price of oil hit a new record of $54 a barrel yesterday amid warnings about the devastating impact on the foreign reserves of poorer countries and of rising petrol costs in Britain.
November delivery on the New York Mercantile Exchange peaked at $54.45 before retreating to $52.51.
The price of UK North Sea Brent blend hit the $51.50 mark for the first time although it, too, dropped to below $51 in later trading.
Supply fears were again blamed for the upward pressure as Nigeria was beset by a national strike and the Russian justice department finally put the axe into Yukos, saying it would sell off part of the oil group's business.
The cost of crude is 80% higher than at the start of 2004 and this has wiped out as much as a third of foreign exchange reserves in some developing countries, the World Bank said.
"We have an impact of 2% to 5% of GDP, depending on the oil dependency and dependency on other sources of energy," said François Bourguignon, the World Bank's chief economist. "If prices remain high for the next year then reserves will not be enough."
Meanwhile the AA said the cost of petrol was rising again in Britain after weeks of stability. The average cost of unleaded has risen to 83.46p a litre after hovering around 82p for a month.
The Association of European Airlines also warned yesterday that higher fuel prices would wipe out company profits this year.
Production has not yet been hit by the strike in Nigeria but many fear it soon will.
The rising cost of fuel comes as Norwegian oil workers increase the scope of their industrial action.
Oil firms are using their rising income to search for new supplies. Shell was also reported yesterday to have put its stake in the InterGen power business up for sale to raise cash for more exploration.
http://www.guardian.co.uk/business/story/0,,1325947,00.html