Oil prices hit fresh records yesterday, climbing close to US$45 after a fire at a big US refinery and a renewed threat to Russian oil major underlined the strain on world supplies.
US light crude struck US$44.77 a barrel, US$0.36 up from Tues-day's settlement and the highest in the 21-year history of crude futures on the New York Mercantile Exchange.
London's Brent crude hit US$41.50 a barrel, a record for the contract since it started trading in 1988 on the International Petroleum Exchange.
Oil has rallied more than 30 percent this year as rapid demand growth, especially in the US and China, leaves little leeway for any supply disruption. Consumption is accelerating at the fastest pace in more than 20 years.
The latest in a string of rallies this week came after a fire shut a gasoline-producing unit at BP Plc's 470,000 barrel-per-day (bpd) refinery in Texas, the third-biggest plant in the US. The flash fire was quickly extinguished.
Gains were reinforced after a financial source said that Russian oil major Yukos had no money in its bank accounts after bailiffs seized US$900 million on Thursday to cover the firm's back tax bill.
Yukos, which pumps 1.7 million bpd, or 2 percent of world supplies, is battling bankruptcy from a multi-billion dollar tax debt, threatening its ability to continue exports.
"Production needs can still survive for a few weeks, but time is coming to pay for transportation fees," a financial source said.
Yukos has repeatedly warned it needs at least US$400 million on its Russian bank accounts to fund core operations such as transportation fees to ensure oil exports.
"All we can say is that we still haven't got a new bailiffs' order that freezes our bank accounts again," Yukos spokesman Alexander Shadrin said.
Yukos has said it had pre-paid this month's transportation fees to pipeline monopoly Transneft but would need to find money by the middle of the month to pay for exports next month.
Fears of inadequate supply have been deepened by security concerns in Saudi Arabia and Iraq as well as uncertainty in Venezuela and Nigeria -- all OPEC members.
"All the supply side issues at the moment are making it extremely difficult to get a good handle on the market," said David Hynes, an oil industry analyst at ANZ Bank in Melbourne.
The OPEC, which controls half of the world's crude exports, is pumping at the highest levels since 1979 as it tries to stem oil's relentless rise.
OPEC president Purnomo Yusgiantoro said yesterday that output was running at 30 million barrels daily and the group was ready to lift production by 1 million to 1.5 million bpd if it was decided necessary when ministers meet next month.
OPEC ministers are scheduled to meet in Vienna on Sept. 15 to review output policy, but only Saudi Arabia, the world's top exporter, has any significant spare capacity to increase supply.
"We are meeting in September and we are ready to increase production if it is necessary with immediate additional production between 1 million and 1.5 million bpd," Purnomo said.
OPEC lifted its official output limits by 500,000 bpd to 26 million bpd on Aug. 1. The limits exclude Iraq, which is struggling to rebuild its oil industry.
Iraqi exports ran at about 1.5 million bpd last month and are expected to rise to between 1.7 and 1.8 million bpd this month.
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