Oil price soars above 45 dollars for first time
NEW YORK : New York's main oil contract shot above 45 dollars for the first time, whipped higher by an uprising in Iraq, a crisis at Russian oil titan Yukos and a tropical storm nearing oil platforms.
New York's benchmark contract, light sweet crude for delivery in September, leapt to 45.04 dollars a barrel before slipping to a close of 44.49 dollars, down three cents.
Brent North Sea crude fell 28 cents to 41.28 dollars.
Unrest in Iraq kept the market on boil, said Oppenheimer market analyst Fadel Gheit.
"The situation in Iraq is definitely totally out of control," Gheit said.
"As long as the Iraqi situation remains volatile, oil prices will remain high," he added.
"We could be looking at 50 (dollars a barrel) in two or three weeks."
Limited amounts of oil were being loaded from Iraq's southern export terminals, a day after pumping of crude was stopped due to threats of attack by Shiite Muslim militia.
At the Basra terminal, exports were down to an average of 35,000 barrels per hour from a previous hourly average of 80,000 barrels, said an official at the terminal on condition of anonymity.
US forces meanwhile urged civilians to evacuate Najaf on the sixth day of clashes with Shiite Muslim militia.
In Russia, Yukos' troubles were adding to the oil market's worries, Gheit said.
"Yukos is sending more confusing signals than ever," he said.
The Russian justice ministry said Monday that its bailiffs had frozen the assets of Yukos' largest subsidiary, Yuganskneftegaz (Yugansk), which accounts for 60 percent of its output.
The future of the subsidiary is crucial for the survival of Russia's largest oil company, which faces a 3.4-billion-dollar (2.76-billion dollars) tax bill for 2000.
Traders worried, too, about the threat of a labor strike in oil-rich Venezuela, where President Hugo Chavez faces a referendum Sunday that could remove him from office.
"It could definitely trigger a labor strike, which would fuel higher prices," Gheit said.
The oil price was supported by Tropical Storm Bonnie's approach to the Gulf of Mexico, dotted with oil platforms.
"We got a bit of a pop in the market but that was met with some technical resistance and profit-taking," said Alaron Trading analyst Phil Flynn.
ChevronTexaco was evacuating all non-essential workers from platforms in the Gulf of Mexico but production was pushing ahead unchanged, company spokesman Matthew Carmichael said.
Evacuations would be suspended overnight and resumed in the morning when Bonnie's trajectory was clearer, he said.
"I have another meeting at 6:45 am Central Standard Time (1145 GMT Wednesday) and then we will have a better picture of which wells we may potentially shut in," Carmichael said.
Crude oil prices in New York are likely to top 30 dollars a barrel for the "foreseeable future," predicted a report by the Department of Energy's research arm.
Imported oil would ease to an average of 34.00 dollars a barrel in 2005, barely down from 34.31 dollars this year, it said.
Higher output by the Organization of Petroleum Exporting Countries (OPEC) had failed to ease pressure on prices, it said.
"Some reduction in prices is likely if increased production continues to flow and inventories build," it said.
"However, short of a serious slow down in demand during the coming months, the floor for prices probably remains above 30 dollars for the foreseeable future."
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