Tuesday, October 16, 2007
Oil prices hit new high as fears grow over Kurdish-Turkish conflict
Oil, Region
(The Guardian) - Oil prices burst through $86 a barrel to reach new highs yesterday on the back of growing energy demand forecasts and fears that escalating conflict between Turkey and Kurds in northern Iraq could hit supplies in the Mediterranean. Crude ended at a record level on Friday but has since gone on to hit even greater peaks of $86.13 as the Organisation of Petroleum Exporting Countries (Opec) said demand for its products would average 31.43m barrels a day in the fourth quarter of 2007, up 100,000 barrels a day on previous estimates.
"It now appears more likely that the US economy could weather the financial crisis without a sharp downturn in economic activity," said a report by Opec economists at the group's Vienna headquarters. Soaring oil prices helped push gold to a 28-year high yesterday as investors were attracted to precious metals because of global uncertainty and the falling dollar. Platinum also swept to record highs on concerns about supply as demand remains strong.
Expectations of higher oil demand have also fed into Opec's first quarter estimates with the organisation predicting there would be 120,000 more barrels needed a day than had been anticipated.
The new forecasts come amid rising fears that Turkey will take unilateral action against Kurdish rebels in northern Iraq. "The main risk to supplies is currently on an escalation of the Turkish army, Kurdish militia conflict, where we believe the risk for disruptions to the Mediterranean supplies would be real," said Olivier Jakob of Petromix in Switzerland.
The market is already jumpy because last week the International Energy Agency, adviser to 26 industrialised nations such as Britain and the US, predicted that demand would surge by 2.1m barrels a day during 2008. Opec insists "the current supply and demand forecasts predict that the market will be fundamentally balanced over the coming quarters".
"It now appears more likely that the US economy could weather the financial crisis without a sharp downturn in economic activity," said a report by Opec economists at the group's Vienna headquarters. Soaring oil prices helped push gold to a 28-year high yesterday as investors were attracted to precious metals because of global uncertainty and the falling dollar. Platinum also swept to record highs on concerns about supply as demand remains strong.
Expectations of higher oil demand have also fed into Opec's first quarter estimates with the organisation predicting there would be 120,000 more barrels needed a day than had been anticipated.
The new forecasts come amid rising fears that Turkey will take unilateral action against Kurdish rebels in northern Iraq. "The main risk to supplies is currently on an escalation of the Turkish army, Kurdish militia conflict, where we believe the risk for disruptions to the Mediterranean supplies would be real," said Olivier Jakob of Petromix in Switzerland.
The market is already jumpy because last week the International Energy Agency, adviser to 26 industrialised nations such as Britain and the US, predicted that demand would surge by 2.1m barrels a day during 2008. Opec insists "the current supply and demand forecasts predict that the market will be fundamentally balanced over the coming quarters".
Labels: Kurdistan, northern Iraq, oil, oil prices, OPEC, Petromix, PKK, Turkey
