Unrest pushes oil prices higher
Oil prices broke through the 46 US dollar mark for the first time tonight as fears of unrest in Venezuela and disruption in Iraq sparked fresh concerns over supplies.
It was the latest in a string of rallies that have pushed the cost of crude to a new 21-year high on an almost daily basis, leaving motorists facing further pain on the petrol forecourts.
Drivers have already been warned to expect another penny on petrol prices during August.
The latest hike came as heavy fighting in southern Iraq renewed fears of a disruption of the country’s vital oil supplies. The possibility of unrest in Venezuela, where President Hugo Chavez faces a referendum on his rule this weekend, was another reason.
News that Chinese oil imports were up 40% from the same period a year earlier was also weighing on investors. China’s growing economy is proving a major factor in soaring global demand.
Analysts said a defeat for Mr Chavez could disrupt oil shipments from Venezuela, which provides between 12% and 13% of the US’ imports.
Bruce Evers, oil analyst at Investec Securities, said this could have severe consequences, adding: “It’s going to be a very nervous weekend for oil traders.”
He said forecasts suggested the cost of crude could move “quite a bit higher” than it is now.
Fears of terrorist attacks, disruptions to Iraqi crude exports and financial troubles at Russia’s largest oil producer, Yukos, have all fuelled soaring prices in recent days.
These have piled pressure on already tight global supplies of crude.
Airline passengers became the latest casualties of the situation earlier this week when both British Airways and Virgin Atlantic more than doubled their long-haul fuel surcharges. The two carriers’ charge of £2.50 rose to £6 for a single long-haul flight, with the figure for a return trip up to £12 from £5.
