Oil breaks $54 amid supply jitters
The price of crude broke through the $54 barrier today, following speculation fuelled by a pipeline explosion in Mexico.
A continued work stoppage in Africa’s largest producer, Nigeria, also affected prices.
Crude for November delivery on the New York Mercantile Exchange was up $0.51 from its overnight closing price of $53.64, trading at $54.14 during after-hours deals early today in Asia.
While oil prices are more than 60% higher than a year ago, they are still around $27 below the peak inflation-adjusted price reached in 1981.
A 30-inch oil line exploded in eastern Mexico yesterday, according to local officials. Enrique Fonseca, a spokesman for the Veracruz state civil defence agency, said workers from the government oil company Petroleos Mexicanos, or Pemex, had closed off the line and were working to contain the spilled oil.
It is not immediately clear what the extent of damage was to Mexican production but it was enough to send shockwaves through the market.
