The Independent: UK oil imports exceed exports as crude tops $45 a barrel (ShellNews.net)
By Susie Mesure
11 August 2004
Oil prices broke through the $45 a barrel barrier to hit a new all-time record yesterday after a key Iraqi pipeline was sabotaged, halting production.
The new peak came as official data revealed the UK had become a net importer of oil in June, for the first time in 11 years.
US light crude touched $45.04 a barrel, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. It later fell to end at $44.50. In London, Brent crude eased back from Monday's record high to $41.27.
Despite clashes between supporters of the Shia cleric Muqtada Sadr and US-led forces, normal production was restored late yesterday afternoon to the main export pipeline from Iraq's southern oilfields, which supplies the main terminal at Basra.
Fresh concerns about political instability in the new Iraq prompted analysts at Barclays Capital to warn that a "prolonged" stop to Iraqi exports "would almost certainly be enough to push oil prices above $50 a barrel".
Oil prices have surged by more than a third since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption. World oil producers are already pumping close to full capacity. The price has also been driven by turmoil at Yukos, the Russian oil major, which is battling bankruptcy. Meanwhile, an approaching storm in the US Gulf prompted Shell to shut down small volumes of production and evacuate 500 workers yesterday.
The Venezuelan Energy Minister Rafael Ramirez said yesterday it could take six months before Opec could increase production capacity. Mr Ramirez said the cartel had little capacity to spare at the moment and added that current prices could go higher. He said Opec would discuss capacity at the cartel's next meeting, on 15 September.
Earlier, Mr Ramirez said that Venezuela expected oil prices to remain near recent record highs for the rest of the year due to rising demand and instability in the Middle East.
US crude prices are unlikely to dip below $30 a barrel for the foreseeable future but could see some relief from ramped-up Opec production in the fourth quarter of 2004, the US Energy Information Administration said yesterday.
The latest surge in oil prices has fed through to British petrol forecourts, where motorists have had to pay an extra 2p a litre over the past 10 days, according to the Petrol Retailers Association. A report by the market research group Taylor Nelson Sofres found that drivers in the North had been worst hit, with the price of a litre of fuel rising by 7 per cent or 6p per litre over the past year. Fuel prices in the South-west remained the highest in the country, averaging 80p over the past year.
Analysts also warned yesterday that the UK was likely to rely increasingly on oil imports. North Sea oil production has been in decline since 1999, although oil is still showing a surplus in the trade figures because of the quality of the crude. The UK could also be reliant on gas exports from as early as 2005.
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