Oil price hits all-time high

Crude oil exceeds $100 a barrel in Asia amide fears of an output cut by Opec.

    Concerns over the dollar are
    driving up oil prices [GALLO/GETTY]
    Nigeria concern

    Oil prices may continue to rise as the weakening dollar attracts new investors to the futures market.

    The spike in prices is a problem for central banks, including the US Federal Reserve, which are grappling with falling consumer spending and a squeeze on available credit.

    However, investors appear to have put aside concerns about the economy that have seen oil prices fall to about $80-85 twice in the past month.

    A threat by a rebel group in Nigeria to escalate its attacks on the nation's crude oil infrastructure helped increase prices overnight.

    The rebels were acting in response to rumours that the government had killed a captured leader. The authorities later said was safe and well.

    Attacks by groups demanding that residents benefit from the resources in the Niger Delta have cut about 20 per cent of Nigeria's crude output in recent years.

    Chavez row

    Meanwhile, traders are focused on Opec, which will meet early next month to decide production plans.

    Venezuela is also a source of concern as Hugo Chavez, the country's president, made conflicting statements last weekend about the country's legal dispute with ExxonMobil.

    Opec could move to cut production in the second quarter of the year, typically a period of low demand, though many analysts feel that's unlikely.

    In Venezuela, Chavez said he was not serious about an earlier threat to cut oil sales to the US, but also threatened to sue ExxonMobil.

    The world's largest oil company is fighting Venezuela's nationalisation of an oil project, and recently convinced several courts to freeze $12bn in Venezuelan oil assets.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    'We scoured for days without sleeping, just clothes on our backs'

    'We scoured for days without sleeping, just clothes on our backs'

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Daughters of al-Shabab

    Daughters of al-Shabab

    What draws Kenyan women to join al-Shabab and what challenges are they facing when they return to their communities?