Oil prices rose over $100 a barrel on Thursday in response a US government report showed a further steep slide in inventories of crude there.
They did briefly break into triple digits on Wednesday, but it later emerged that was because of one tiny purchase by a New York trader who wanted to make history, so bought at $100 and immediately sold at a loss.
Having been close to $50 a barrel just under a year ago, the price of US light sweet crude rose 57% in 2007. In London, Brent hit a new all-time high on Thursday.
Reacting to the $100 barrel, energy ministers from countries in the OPEC cartel said they cannot tame the price rise because it is not due to supply problems.
So far the high cost of crude has had little impact on demand and producer countries continue to rake in the cash though they are being paid in dollars, the purchasing power of which have fallen.
Fresh unrest in Nigeria has been one trigger for the high prices. New York based trader Ray Carbone explained: “It’s quite understandable given the problems in Nigeria, they are going to continue; I don’t see any end to the militant activity down in the Niger delta. Of course the Pakistani assassination, even though they are not an oil-producing country, it has ramifications that are only supportive of the market.”
The higher crude prices are feeding through to consumers, but the US government and the International Energy Agency both say they will not release any of their emergency reserves as they are kept for use if there is a disruption to supplies.