Oil prices have finally overcome the landmark psychological barrier and reached the level of $100.01 per barrel in New York yesterday. The price marked the new all-time record of the oil market and exceeded its previous record of January 3 by one cent.
In the beginning of January a market member purchased 1,000 barrels of oil for $100 per barrel to immediately sell the fuel for $99.4 and eventually lose $600 on the deal. Experts say that someone wanted to become famous in an instant. It was a far-fetched increase in oil prices, specialists believe.
The current situation is different. The price has overcome the level of $100 due to a whole list of reasons. First and foremost, the new prices appeared as a result of the conflict between the government of Venezuela and the USA’s Exxon Mobil. Venezuela has virtually ousted Exxon Mobil from the country, which made it suffer immense losses. President Hugo Chavez said that the opposition with the oil company may eventually force Venezuela cease their oil shipments to the USA. The court hearings on the case will start on February 22 in London.
In addition, an explosion occurred at an oil refinery in Texas on February 18. The capacity of the refinery reached 700,000 barrels a day. Prices on petroleum products skyrocketed after the accident, which technically contributed to the growth of oil quotations.
The decline of the dollar rate and a possible reduction of OPEC’s oil output also affected the fuel cost. The OPEC may take such a decision against the background of the economic setback in the USA, which is the world’s largest consumer of oil. The decision is likely to be made on March 5, during the OPEC meeting in Vienna.
It is worthy of note that the OPEC decided to keep the oil mining on its current level in December of 2007, at a special meeting of OPEC members. Many experts said that it was an earth-shattering decision to make for the world oil market because the preservation of the oil output was capable of leading to negative consequences for both the oil market and the global economy.
The abrupt increase of oil prices sent the stock market in Tokyo down. Its key index Nikkei dropped by over three percent. The same trend appeared later on European markets. Shares of Europe’s largest airline Air France-KLM Group dropped by 1.6 percent. The chemical giant BASF lost 1.7 percent; the British index FTSE 100 slid 0.68 percent down; the German DAX -0.8 percent; the French CAC -0.52 percent, the Swiss SMI -0.25 percent.
Translated by Dmitry Sudakov