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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (1951)	8/26/2005 10:55:57 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24213

China driving oil sky-high NICK BEVENS BUSINESS EDITOR CRUDE oil prices have increased nearly 60 per cent since the start of the year, as the cost of a barrel of oil yesterday hit $68. The fresh rise came after the United States reported a decline in petrol stocks, but the driving force remains the ongoing economic expansion of China, which said its crude imports jumped again in July, as strong demand on the mainland showed no signs of easing. The price rises of the past week have now forced the International Energy Agency (IEA) to estimate that demand for oil will increase by 1.6 million barrels per day (mbd) in 2005, bringing total demand to 83.8-83.9mbd. The IEA estimates that world demand will further grow in 2006, by another 1.8mbd, to reach 85.6-85.7mbd. The October crude contract hit a new record high of $68 in early morning trade, but dropped to $66.60 a barrel, as analysts expected Tropical Storm Katrina to miss the bulk of oil and natural-gas facilities in the Gulf of Mexico. The contract was at $67.49 , up 17 cents, in late trading on the New York Mercantile Exchange. October Brent on London's International Petroleum Exchange was 26 points higher at $66.27 a barrel. On an inflation-adjusted basis, prices would need to hit about $90 a barrel to match the highs of 25 years ago. The price was $43.50 on 1 January 2005. A sharp increase in early Asian trade came after China released data showing that its crude imports were up 15 per cent on the year in July, when crude on the New York Exchange hit $60 for the first time. Petroleum data from Beijing showed China imported 11.1 million tonnes of crude oil in July, an average of 2.62 mpd. In the first seven months of this year, China's crude oil imports are up by 5.4 per cent year-on-year. Yesterday, the US energy department said domestic inventories of petrol fell by 3.2 million barrels last week to 194.9 million barrels, or 7 per cent below year-ago levels. US supplies of crude oil grew by 1.8 million barrels to 322.9 million barrels, or 13 per cent above year-ago levels, the agency said. The supply of distillate fuel, which includes heating oil and diesel, increased by 1.4 million barrels to 132.5 million barrels, or 4 per cent above last year's level. "Gasoline continues to take the market higher and the overall technical picture suggests that at some stage we are going to hit $70 a barrel," said Orin Middleton, an energy analyst at Barclays Capital in London. The International Monetary Fund (IMF) said that Asian economic growth could now be derailed by high oil prices, and warned of high inflation in Indonesia and the Philippines. IMF managing director Rodrigo de Rato warned that high oil prices posed a significant risk to global economic expansion, and said they were not likely to fall in the near term. Kevin Blemkin at Man Financial predicted $70 within days. "The only thing that could put a brake on the rally is if we start to see the economy slowing down. But people still seem quite happy to pay these prices," Blemkin said. Oil's latest surge weighed on London shares after a fall on Wall Street last night. The FTSE 100 index slipped 19.5 points to 5,255.7. business.scotsman.com