Oil prices move past $67 for first time
FT.com / World / Asia-Pacific - Oil prices move past $67 for first time
By Javier Blas in London
Published: August 12 2005 20:20 | Last updated: August 12 2005 20:20
US oil prices broke through $67 a barrel for the first time on Friday, setting their fifth consecutive nominal record as latest oil consumption data show high crude prices are hitting emerging Asian economies.
The International Energy Agency, the industrial countries' watchdog, highlighted the economic impact as it cut its growth forecast for oil demand from the region for this year to 3.1 per cent, down from last year's 5.2 per cent growth.
“There is evidence that growth in key [Chinese] energy consuming industrial sectors has slowed to a certain extent,” the IEA said. But strong consumption in other areas is offsetting the soft demand from Asia and supporting oil prices, and worldwide oil demand is still forecast to accelerate in 2006.
The impact of record oil prices has been accentuated recently as several Asian countries, including Thailand, China and Vietnam, cut fuel subsidies and passed the burden of higher oil costs from their national budgets to households.
Indian oil companies are also pressing the government to lift the price they can charge consumers as the refineries face mounting losses.
The increase in the retail price of petrol has triggered a slowdown in Chinese consumption, as households face higher fuel bills. China is the second largest oil importer, behind the US.
Oil prices were up $1.40 to $67.10 in afternoon New York trading, before closing just below $67, as a spate of refinery outages at BP, ConocoPhillips and Premcor plants in the US increased market worries about winter supply. The Nymex September contract finished in New York at $66.86.
“A tense geopolitical situation plus a recent glut of crude oil production shortfalls are all serving to put additional upward pressure on prices,” said Kevin Norrish, of Barclays Capital in London.
The spiralling price of oil added further to the US import bill in June, which helped to push the US trade deficit to $58.8bn, a 6.1 per cent increase.
Crude oil imports climbed to $14.6bn in June compared with $13.7bn in May. The politically sensitive trade deficit with China increased by $1.8bn to $17.6bn. Any deterioration in this bilateral deficit has tended to inflame trade tensions with China.
Additional reporting by Christopher Swann in Washington
By Javier Blas in London
Published: August 12 2005 20:20 | Last updated: August 12 2005 20:20
US oil prices broke through $67 a barrel for the first time on Friday, setting their fifth consecutive nominal record as latest oil consumption data show high crude prices are hitting emerging Asian economies.
The International Energy Agency, the industrial countries' watchdog, highlighted the economic impact as it cut its growth forecast for oil demand from the region for this year to 3.1 per cent, down from last year's 5.2 per cent growth.
“There is evidence that growth in key [Chinese] energy consuming industrial sectors has slowed to a certain extent,” the IEA said. But strong consumption in other areas is offsetting the soft demand from Asia and supporting oil prices, and worldwide oil demand is still forecast to accelerate in 2006.
The impact of record oil prices has been accentuated recently as several Asian countries, including Thailand, China and Vietnam, cut fuel subsidies and passed the burden of higher oil costs from their national budgets to households.
Indian oil companies are also pressing the government to lift the price they can charge consumers as the refineries face mounting losses.
The increase in the retail price of petrol has triggered a slowdown in Chinese consumption, as households face higher fuel bills. China is the second largest oil importer, behind the US.
Oil prices were up $1.40 to $67.10 in afternoon New York trading, before closing just below $67, as a spate of refinery outages at BP, ConocoPhillips and Premcor plants in the US increased market worries about winter supply. The Nymex September contract finished in New York at $66.86.
“A tense geopolitical situation plus a recent glut of crude oil production shortfalls are all serving to put additional upward pressure on prices,” said Kevin Norrish, of Barclays Capital in London.
The spiralling price of oil added further to the US import bill in June, which helped to push the US trade deficit to $58.8bn, a 6.1 per cent increase.
Crude oil imports climbed to $14.6bn in June compared with $13.7bn in May. The politically sensitive trade deficit with China increased by $1.8bn to $17.6bn. Any deterioration in this bilateral deficit has tended to inflame trade tensions with China.
Additional reporting by Christopher Swann in Washington
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