Oil prices hit record $98

Analysts say price of crude oil on the way to breaking $100 a barrel.

    Oil prices are expected to reach
    $100 a barrel [EPA]

    Manouchehr Takin, a London energies analyst, told Al Jazeera on Wednesday: "The fundamental level of supply and demand has changed.

     

    "Usually at this time of year there is an increase in inventories [but] this year the amount stored … is lower".

     

    Supply crisis

     

    The surge brings oil close to the peak of more than $101 hit in 1980 when war between OPEC producers Iran and Iraq led to an oil supply crisis.

     

    One of the countries benefiting most from the price rise is Venezuela, a country whose president, Hugo Chavez, is an outspoken critic of the US.

     

    Caracas has announced it is ready to provide a major increase in oil production under a deal it has struck with the Chinese government ... pledging half-a-million barrels a day to a nation whose demand is now approaching that of the US.

     

    Current demand - fuelled by rapid economic growth in China and a steady increase from the US - has been a major driver behind oil prices more-than-quadrupling since 2002.

     

    China is expected to overtake the United States as the world's top energy consumer soon after 2010, the International Energy Agency (IEA) said on Wednesday.

    SOURCE: Agencies


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