Oil price hits new high
The price of oil hit a new record above US$96 a barrel today after a surprise drop in stockpiles raised concerns about winter supplies.
It was the second week in a row the US Energy Information Administration has reported a sharp and unexpected drop in oil inventories.
Light, sweet crude for December delivery rose as high as US$96.24 a barrel in electronic trading on the New York Mercantile Exchange, although the price later fell back below US$96.
The latest increase threatens to push the average price of unleaded petrol over the £1 a litre mark for the first time. Yesterday, the AA Motoring Trust said the average stood at 98.7p.
Crude prices have now reached inflation-adjusted highs set in early 1980.
The weak dollar has also played a part in oil’s price rise, as investors look for a hedge against the weak greenback. The pound was close to the US$2.08 mark today after the US Federal Reserve cut interest rates yesterday.
Escalating tensions in the Middle East have added to concerns over global oil supply.
Prices have also been inflated by Turkey’s threats to Kurdish rebels, as well as the US government’s tough stance last week against Iran, which is the world’s fourth largest oil producer.
