Suspended Ecuador supplies stretch oil prices by more than a dollar

22-Aug-05

Problem ridden US refineries have heightened supply concerns in recent weeks, pushing New York futures to a historic high of US$67.10 and to US$66.85 in London. Prices, that declined by 5 dollars since hitting these record levels, have once again spiked by over a dollar. Ecuador, South America's fifth-largest oil producer, has halted exports amid violent protests in two oil-rich provinces, where striking workers and the local population have taken over almost 35 oil wells. This agitation is to force negotiations for a bigger share of oil revenues. Over 50% of Ecuador's exports go to the United States, and any indication of a dent is supplies, is enough to push the already sensitive oil prices higher. Concerns over tight global supply led the September main contract for light sweet crude to rise to US$64.55 per barrel in New York, whereas the price of Brent crude for delivery in October rose to US$63.79 per barrel in London.