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London, Aug 19: Oil prices struck a fresh record high above $47.50 a barrel on Thursday as fresh evidence of demand growth in China and India underlined how rising appetite for oil is straining the world’s supply system.
US light crude rose 28 cents to $47.56 a barrel and London Brent gained 27 cents to $43.30 a barrel. US prices have set record peaks in all but one of the past 15 trading sessions and are up by about $10.50 a barrel, or 28 per cent since the end of June. Rising demand in emerging economies China and India have shaken up the oil market this year intensifying competition for supply with established consuming giants such as the United States. China’s refineries have processed 17.2 per cent more crude so far this year than in 2003, the county’s State Statistical Bureau said on Thursday. Crude imports have soared nearly 40 per cent from last year. India’s biggest refiner, State-run Indian Oil Corp Ltd said that it expected India’s crude oil imports to rise by 11 per cent in 2004-05 as demand rises by nearly 4 per cent. In the United States, which guzzles around a quarter of the world oil, demand so far this year is up 3.4 per cent, stopping inventories building much as rising consumption absorbs extra imports from Opec producers such Saudi Arabia. US government data for the week on Wednesday showed commercial crude oil supplies had fallen 1.3 million barrels to 293 million barrels last week, the third straight week of declines. Rising demand has left little slack in the system to cope with any supply problems, such as those in Iraq, where Shi’ite militia have said that they will target oil infrastructure, if US forces do not leave the holy city of Najaf.
Iraq’s main southern pipeline has been shut since a sabotage attack on August 9, curbing export flows to about a million barrel daily, half normal rates, through a secondary line. “The situation in Basra is still deemed too dangerous to operate the line although headquarter employees returned to work on Thursday and events in Najaf are encouraging,” a south oil company official on Thursday. Nerves were little calmed by Opec assurances on Wednesday that it had raised output in July to a level that should permit a substantial build-up in world oil stocks in the fourth quarter. Opec is pumping at its highest level since...
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