Bull market for crude hits another nine-year high

Source: AAP | Published: Tuesday March 7, 10:40 AM

CHICAGO, March 6 - Another day, another nine-year high for oil prices.

Crude oil surged to its latest in a series of high-water marks today on the New York Mercantile Exchange, extending its advance above $US32 a barrel as supply disruptions from the North Sea and Nigeria further tightened fast-dwindling stockpiles.

Other energy commodities also gained.

West Texas Intermediate crude for April delivery rose to as much as $32.20 a barrel before settling up 67 cents at $32.18, the highest closing price since November 29, 1990.

The 2 per cent jump resulted in part from news that Norway's state-owned Statoil had reduced output from its North Sea fields due to bad weather that had limited loadings and left storage facilities almost full, and that a Nigerian oil workers' strike had interrupted loadings in that country.

With world crude stockpiles just above 23-year lows, any interruption in supplies has a disproportionate impact on the tight market.

Growing resistance by some oil producers to a production increase also contributed to the price surge. Iran's oil minister was quoted as saying there was no need to raise production, and Libya and Algeria echoed his sentiments.

"This is a market that needs every barrel," said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. "Those types of statements and developments just help to send prices higher until we see oil coming."

OPEC nations, he speculated, would like to see prices closer to $35 a barrel before they make their long-expected announcement that the cartel will raise production. That would result in the extra oil dropping prices back to no lower than $25 a barrel, rather than the low $20s that some had predicted earlier.

In London, April Brent crude from the North Sea rose 64 cents to $US29.63 a barrel on the International Petroleum Exchange.

http://www.theage.com.au/breaking/0003/07/A59372-2000Mar7.shtml

-- Martin Thompson (mthom1927@aol.com), March 06, 2000