MercoPress. South Atlantic News Agency

Oil closer and closer to 50US dollars the barrel

The volatile oil market ended the week with new record prices, ever closer to the 50 US dollars per barrel benchmark.

The threat of political unrest in Venezuela, sabotage to pipelines in Iraq, ongoing problems with the Russian company Yukos and an explosion in a refinery in the US contributed to push the US light crude to 46,58 US dollars a barrel and in London Brent oil finished at 43,88 US dollars, a 30% increase since the beginning of the year.

Analysts are warning that in the current circumstances oil may rise even higher reaching 50 US dollars.

A growing demand, mainly from China and India, and the US economy recovery are straining the world supply of oil with producers pumping flat out.

Chinese demand is 40% above a year ago and has become the world's second oil importer behind the US.

Saudi Arabia's announcement this week that it will pump a further 1,3 million barrels per day virtually had no lasting impact for the market more concerned with Venezuela and Iraq.

This Sunday Venezuelans will be voting in a recall referendum on President Hugo Chavez which could end in political disarray and the country is the world's fifth producer of crude. Similarly terrorist attacks in Iraq could again disrupt production as has repeatedly happened. Yukos in Russia which supplies 2% of world production is also threatened by political problems with the government that are strangling the company financially.

The feeling in oil markets is that things will get worse before they begin improving.