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How High Can It Go?
| Good [+1]Toggle ReplyLink» basdini replied on Tue Oct 16, 2007 @ 6:44am |
 Coolness: 145250 | Oil prices have remained at record levels above $86 a barrel amid tensions between Turkey and Kurdish rebels in northern Iraq and output concerns.
In Asian trading, US light, sweet crude rose to $86.76 a barrel - having set a record of $86.13 on Monday - while Brent crude surged further to $83.09. Analysts said the rises followed reports that Turkish forces had shelled an Iraqi border village in recent days. Separately, Opec said that non-member nations were set to cut production. About 110,000 fewer barrels of oil would be produced each day by those not part of the cartel, the oil producers' group said in a report. Last month, Opec said that it would be boosting its production by 500,000 barrels per day from the beginning of next month to cope with resilient global demand for oil. However, it has since added that demand for oil this winter in the US - the world's largest consumer of heating oil - will be stronger than previously thought. Economic impact The Turkish government is preparing a motion seeking parliamentary approval for a military incursion into northern Iraq after 13 Turkish soldiers were killed close to the Iraqi border. Ankara estimates that 3,500 Kurdistan Workers' Party (KWP) rebels - who want to see the establishment of an independent Kurdish homeland - are based across the border in Iraq. Analysts said Turkey's decision to ask for permission to pursue Kurdish rebels into Iraq fuelled fears that hostilities would disrupt oil supplies. Oil prices have quadrupled since 2002 as a result of demand from fast-growing economies such as China and India, allied to instability in oil-producing nations in the Middle East and Africa. The cost of oil is still below the inflation-adjusted level of about $90 a barrel witnessed in 1980. But analysts believe the current price spike will inevitably have an impact on growth in the world economy, already expected to slow next year. "My guess is that you'll see it affect stock market prices and economic growth," said Ray Carbone, president of oil trading firm Paramount Options. [ news.bbc.co.uk ] |
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How High Can It Go?
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