Oil prices scale record highs in Asian trade
Friday, 2 November 2007
SINGAPORE, Nov 1 (AFP): Oil prices scaled record highs of more than 95 dollars a barrel in Asian trade today after the Federal Reserve lowered interest rates and following news of a surprise decline in US crude stocks.
New York's main futures contract, light sweet crude for delivery in December, was trading at 95.26 dollars a barrel, up 73 cents from its close of 94.53 dollars a barrel in US trades, and smashing Wednesday's record of 94.74 dollars.
The New York contract earlier surged to an all-time intraday summit of 95.80 dollars.
Brent North Sea crude for December delivery also erased the previous day's intraday high of 90.94 dollars to trade at 91.10 dollars, up 47 cents.
"The increase in oil prices was driven by the release of the US Energy Information Administration's Weekly Petroleum Status report, which showed a large decline in US crude oil inventories," Australia's Commonwealth Bank said.
Oil prices, which had earlier slumped below 90 dollars Wednesday, staged a blistering rally after the Federal Reserve cut key US interest rates by a quarter of a percentage point to 4.50 per cent.
The cut is targetted to boost domestic consumption in the world's biggest economy and cushion the impact of a crisis in the US subprime mortage housing market which has been rocked by defaults. A healthy US economy prompts higher demand for oil.
Oil prices also rose after the US Department of Energy's (DoE) weekly snapshot of energy reserves showed that crude inventories tumbled by 3.9 million barrels to stand at 312.7 million barrels in the week ended October 26.
That shocked the market because consensus forecasts had been for a gain of 400,000 barrels in the reserves of the world's biggest energy consumer and underscored a tight supply situation.
Meanwhile, record high oil prices risk hurting future demand and OPEC (Organisation of Petroleum Exporting Countries) must find a "price equilibrium", Ecuador's oil minister said in an interview published today.
Speaking to the Financial Times via telephone, Galo Chiriboga, whose country will re-join OPEC next month, said that crude oil prices topping 94 dollars a barrel could spark increased investment in alternative energy sources.
He said that the biggest challenge for the OPEC in the coming years would be to "preserve a price equilibrium that keeps crude oil positioned favourably against other alternative energy sources."
New York's main futures contract, light sweet crude for delivery in December, was trading at 95.26 dollars a barrel, up 73 cents from its close of 94.53 dollars a barrel in US trades, and smashing Wednesday's record of 94.74 dollars.
The New York contract earlier surged to an all-time intraday summit of 95.80 dollars.
Brent North Sea crude for December delivery also erased the previous day's intraday high of 90.94 dollars to trade at 91.10 dollars, up 47 cents.
"The increase in oil prices was driven by the release of the US Energy Information Administration's Weekly Petroleum Status report, which showed a large decline in US crude oil inventories," Australia's Commonwealth Bank said.
Oil prices, which had earlier slumped below 90 dollars Wednesday, staged a blistering rally after the Federal Reserve cut key US interest rates by a quarter of a percentage point to 4.50 per cent.
The cut is targetted to boost domestic consumption in the world's biggest economy and cushion the impact of a crisis in the US subprime mortage housing market which has been rocked by defaults. A healthy US economy prompts higher demand for oil.
Oil prices also rose after the US Department of Energy's (DoE) weekly snapshot of energy reserves showed that crude inventories tumbled by 3.9 million barrels to stand at 312.7 million barrels in the week ended October 26.
That shocked the market because consensus forecasts had been for a gain of 400,000 barrels in the reserves of the world's biggest energy consumer and underscored a tight supply situation.
Meanwhile, record high oil prices risk hurting future demand and OPEC (Organisation of Petroleum Exporting Countries) must find a "price equilibrium", Ecuador's oil minister said in an interview published today.
Speaking to the Financial Times via telephone, Galo Chiriboga, whose country will re-join OPEC next month, said that crude oil prices topping 94 dollars a barrel could spark increased investment in alternative energy sources.
He said that the biggest challenge for the OPEC in the coming years would be to "preserve a price equilibrium that keeps crude oil positioned favourably against other alternative energy sources."