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London Brent hits new record above $74
April 20th 2006.
IPE Brent crude hit a new record high above $74 a barrel this morning after a drop in US petrol stocks and on concern Iran's nuclear row with the West may cut oil supplies from the world's fourth-largest producer.
By 9am, Brent crude was up 37 cents at $74.10 a barrel, having earlier climbed as high as $74.16.
In Asian trade, light sweet crude for May delivery remained above $72 today after reaching an intra-day all-time high of $72.40 in New York trading yesterday.Dealers said a fall in US petrol stocks exacerbated tension in an energy market already spooked by the prospect of a conflict in Iran over its alleged programme to develop nuclear weapons.
US petrol stockpiles fell 5.4 million barrels last week, twice as much as analysts had expected, ahead of the summer driving season. US crude oil reserves fell 800,000 barrels in the week to April 14 to 345.2 million barrels, surprising analysts who had been expecting a rise of 2.3 million barrels.
The fall in petrol stocks come at a crucial time as the peak driving season in the US approaches, analysts said. The onset of the Atlantic hurricane season could further whip up the market, with major storms such as Hurricane Katrina last year seen to add $5-10 to oil prices on top of the premium from the Iranian nuclear row.
Analysts said that trading above the $70 level could become the norm.
World powers who met yesterday in Moscow for a second day of talks failed to agree on how to halt Iran's nuclear drive. Russia and the US remained divided over the imposition of sanctions and possible use of a military strike.
Washington has accused Iran of working secretly to build nuclear weapons under cover of a nuclear energy programme it is developing with Russian assistance. Iran, the world's fourth largest producer of crude oil, denies this charge and says the programme is strictly for producing nuclear energy.
Security analysts have said that in the event of a conflict, Iran could block the Strait of Hormuz, a strategic choke-point for oil exports to Japan, the US and Western Europe.
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