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Days of cheap oil over as prices reach record levels

The Scotsman: Days of cheap oil over as prices reach record levels

“An industry source said that Shell has lost up to 40,000 barrels of daily oil production as violence swept across Nigeria’s Delta region.”

CATRINA STEWART

28 Sept 04

GLOBAL oil prices neared $50 a barrel yesterday, as they climbed to their highest levels on the back of an outbreak of violence in Nigeria.

US light crude oil, the American benchmark, peaked at $49.75 a barrel, its highest level in 21 years of trading on the New York Mercantile Exchange. Brent, Europe’s benchmark crude, also set new records, at $46.28 a barrel.

Prices eased in afternoon trading, but analysts warned that the era of cheap oil was over and predicted that futures would hit $50 a barrel later this week.

The price of crude has reacted violently to recent short-term disruptions to supply. An industry source said that Shell has lost up to 40,000 barrels of daily oil production as violence swept across Nigeria’s Delta region.

Short-term disruptions to supplies in Iraq, Venezuela and the US over the past 18 months have been compounded by the rapid growth in energy demand in China and India, two of the world’s fastest-growing economies.

http://news.scotsman.com/international.cfm?id=1134062004

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