LONDON, Aug 16: World oil prices set new record high points on Monday but later retreated as traders reacted with relief to a referendum victory by Venezuelan President Hugo Chavez.
New York's light sweet crude for September delivery reached a new all-time high level of $46.91 a barrel in Asian trading. But prices later slid after electoral authorities in Venezuela, the world's fifth largest oil exporter, announced Chavez had won a referendum on his mandate, with over 58 per cent of the vote.
The benchmark US contract fell 53 cents to $46.05 in early trading in New York. In London the price of Brent North Sea crude oil for delivery in September spiked up to a new historic peak of $44.11 a barrel in afternoon trading on news of an attack on an oil well in southern Iraq.
But the rally quickly fizzled out and in late afternoon deals the contract was back in the red, down eight cents at $43.80. Chavez appeared to have "survived quite easily the referendum, so prices are coming off on the basis of that," said Paul Goodhew, a trader at GNI-Man Financial.
However, price falls were limited by persistent concerns over unrest in Iraq, a financial crisis at Russian oil titan Yukos and strong demand, analysts said. "The bottom line is that there is very little excess capacity in the market," said Rigby.
Prices spurted high in London as news emerged that insurgents had fired a rocket-propelled grenade Sunday at an oil well 40 kilometres east of Amara near the village of Al-Mawil in southern Iraq.
Iraqi crude exports through southern Iraq have been slashed by militia threats against oil infrastructure amid battles between US troops and Shiite Muslim fighters in the holy city of Najaf.
Iraq shut down a crucial southern oil pipeline for security reasons, a spokesman for the Southern Oil Company said on Saturday. Meanwhile Iraqi oil flows resumed on Saturday to the Turkish port of Ceyhan at levels not seen for the past year, said an official with the state-owned Northern Oil Company.
And the chief financial officer of Yukos, Bruce Misamore, warned that the energy giant might file for bankruptcy in the next few days unless the Russian authorities reduce the pressure they have been applying. -AFP