LONDON, Aug 9: World oil prices eased on Tuesday on profit-taking, after striking record heights on security concerns in the Middle East and disruptions to production facilities in the United States and Europe, analysts said.
The Organization of Petroleum Exporting Countries (Opec) meanwhile said that it has boosted production in a bid to help cool prices, which have hit more than $64 per barrel. New York’s main contract, light sweet crude for delivery in September, fell 39 cents to $63.55 per barrel in early trading after striking $64.27 late Monday — the highest level since it was first traded in 1983.
The price of Brent North Sea crude oil for delivery in September declined 22 cents to $62.48 per barrel on Tuesday. It had earlier in the day burst through the $63-level for the first time, hitting $63.06.
Prices are high on “a combination of the concerns over Saudi security, the tensions over the Iranian nuclear programme and more refinery problems in the US”, Global Insight analyst Simon Wardell said. “They are all converging to push prices as high as they’ve gone.”
Disruption to world production facilities was also a factor behind spiking prices as oil companies battle to provide sufficient gasoline and heating fuel to meet robust demand, particularly from the northern hemisphere.
Anglo-Dutch energy giant Royal Dutch Shell said on Tuesday that it had evacuated 86 workers from the Brent Bravo platform after a “very small” oil leak was discovered on the rig, located in the North Sea off the northeast coast of Scotland.
A number of refineries have been hit also by shut-downs.
“US refineries are being pushed 24 hours-a-day, seven days-a-week and sooner or later that causes problems,” Alaron analyst Phil Flynn said.
Meanwhile, Opec said on Tuesday that it had boosted production by 300,000 barrels a day in the last several weeks in the face of surging oil prices. That took its total output to 30.4 million barrels per day — above its official quota.
“Opec is as concerned as everybody about the sudden spike in oil prices and we are doing what we have to by increasing actual production,” a spokesman said, contacted by telephone at the cartel’s headquarters in Vienna.
He said no decision had been taken on implementing a 500,000-barrel-a-day increase in Opec’s official production quota to 28.5 million barrels a day, an option that Opec ministers left open at their last meeting in June.—AFP
