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Opec warns of $200 oil as price hits new high
Graeme Wearden guardian.co.uk,
Monday April 28 2008
It was last updated at 15:01 on April 28 2008.
BP Grangemouth oil refinery. Photograph: Murdo Macleod
The Grangemouth refinery strike and militant attacks in Nigeria pushed the price of oil to a new high today, just shy of the $120 a barrel mark. The new record came as the president of oil producer group Opec, Chakib Khelil, warned that the falling dollar could push prices as high as $200 a barrel.
In early trading today, a barrel of US light crude hit a record $119.93. It fell back to $118.80 by midday.
Traders said that the Grangemouth dispute had led to new fears of supply shortages. Workers at the refinery began a 48-hour strike yesterday, forcing BP to close its Forties Pipeline System which delivers a third of the UK's North Sea oil to the mainland.
Neither side in the dispute over pensions has shown any sign of backing down. There were reports on Sunday that further "secret strikes" could be planned, which would also disrupt fuel supplies.
Militant attacks in Nigeria have also pushed the oil price higher. On Friday, Royal Dutch Shell was forced to cut production in the country after rebels attacked one of its major oil pipelines.
The price of a barrel of oil has risen by 25% since the start of the year, partly driven by the weakening dollar. Opec has resisted pressure to increase production, saying that the current high prices are caused by speculation rather than supply issues.
Britain's motorists are feeling the pain at the pumps where prices are also at record highs. The AA reported this month that petrol now costs an average of 109.2p a litre, with diesel at 119.3p.
Meanwhile, the Algerian government newspaper El Moudjahid reported today that the Opec president does not rule out oil prices reaching $200 a barrel, even though supply is adequate, because of the dollar's slide.
"Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar," El Moudjahid reported.
"In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geopolitical problems and the fall of the dollar, the prices of oil would not be at this level," he was quoted as saying.
Khelil, a former World Bank official, is also Algeria's minister of energy and mines.
He added: "The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls 1%, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
He also added: "If this (the dollar) strengthens by 10%, it is probable that (oil) prices will fall by 40%."
Graeme Wearden guardian.co.uk,
Monday April 28 2008
It was last updated at 15:01 on April 28 2008.
BP Grangemouth oil refinery. Photograph: Murdo Macleod
The Grangemouth refinery strike and militant attacks in Nigeria pushed the price of oil to a new high today, just shy of the $120 a barrel mark. The new record came as the president of oil producer group Opec, Chakib Khelil, warned that the falling dollar could push prices as high as $200 a barrel.
In early trading today, a barrel of US light crude hit a record $119.93. It fell back to $118.80 by midday.
Traders said that the Grangemouth dispute had led to new fears of supply shortages. Workers at the refinery began a 48-hour strike yesterday, forcing BP to close its Forties Pipeline System which delivers a third of the UK's North Sea oil to the mainland.
Neither side in the dispute over pensions has shown any sign of backing down. There were reports on Sunday that further "secret strikes" could be planned, which would also disrupt fuel supplies.
Militant attacks in Nigeria have also pushed the oil price higher. On Friday, Royal Dutch Shell was forced to cut production in the country after rebels attacked one of its major oil pipelines.
The price of a barrel of oil has risen by 25% since the start of the year, partly driven by the weakening dollar. Opec has resisted pressure to increase production, saying that the current high prices are caused by speculation rather than supply issues.
Britain's motorists are feeling the pain at the pumps where prices are also at record highs. The AA reported this month that petrol now costs an average of 109.2p a litre, with diesel at 119.3p.
Meanwhile, the Algerian government newspaper El Moudjahid reported today that the Opec president does not rule out oil prices reaching $200 a barrel, even though supply is adequate, because of the dollar's slide.
"Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar," El Moudjahid reported.
"In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geopolitical problems and the fall of the dollar, the prices of oil would not be at this level," he was quoted as saying.
Khelil, a former World Bank official, is also Algeria's minister of energy and mines.
He added: "The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls 1%, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
He also added: "If this (the dollar) strengthens by 10%, it is probable that (oil) prices will fall by 40%."
