LONDON, July 20: Oil prices in New York took a step closer to record levels on Tuesday as the market fretted over rising demand, analysts said.
The price of Brent North Sea crude oil for delivery in September, the new reference contract, climbed by 15 cents to $38.05 per barrel in late trading in London.
New York's light sweet crude benchmark August futures won 11 cents to $41.75 per barrel in early deals. New York's contract had risen by 39 cents to $41.64 per barrel on Monday, the highest close since the June 1 record finish of $42.33.
"Demand is very very strong," Barclays Capital analyst Kevin Norrish said on Tuesday. "Demand in the US and China is growing rapidly even though they are the two countries that are the most exposed to the dollar price of oil.
"But they are also the two countries that have made the most significant contribution to global growth, which explains their strong oil demand," Norrish added. Amid a background of rising world demand for oil, the Organization of Petroleum Exporting Countries agreed in June to raise its output ceiling by 2.5 million barrels per day in two stages.
Opec first increased production by two million bpd on July 1 and was set to raise output by a further 500,000 bpd from August 1. That would bring the production of the 10 Opec states in the quota system - Iraq is not included - to a total of 26 million barrels per day.
Opec, in its monthly report published on Monday, said world oil demand would row by two per cent to 82.56 million bpd in 2005. Elsewhere, traders were looking ahead to publication on Wednesday of the latest weekly estimates of commercial US inventories, expected to show rises in stocks of crude and distillates, but falls in gasoline. -AFP
