As tensions mounted over OPEC-member Iran's nuclear crisis, oil prices surged on Friday to the highest level since Katrina and Rita. U.S. crude oil rose to US$68.35 a barrel after hitting a peak of $68.80 - the highest level since September 2, and London Brent crude rose to US$66.43. Crude prices have jumped more than 8% so far this year, bringing them close to the record US$70.85 touched onAugust 30 after Hurricane Katrina slashed output in the Gulf of Mexico.
If UN Security Council is to proceed with sanctions against Iran, the world's fourth largest oil exporter, oil prices are estimated to spike above US$100 per barrel. Adding to supply worries was the shutdown due to civil unrest of over 220,000 bpd of oil in Nigeria. Cold weather in Russia has led Moscow to cut natural gas supplies to Europe and trim oil production.
The Organization of the Petroleum Exporting Countries has forecast world oil demand to reach 84.8 million bpd this year compared with 83.2 million bpd in 2005. OPEC, scheduled to meet at the end of the month to review its output policy, is considered unlikely to cut production.
23-Jan-06 
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