MercoPress. South Atlantic News Agency

Oil prices moving to the 60/65 US dollars pb range

Oil prices rose to almost 60 US dollars per barrel on Monday following growing security concerns in Nigeria, a strike threat in Norway and deepening worries about insufficient refining capacity.

US Texas light crude hit 58,82 US dollars a barrel in Europe and 59,92 US dollars in the NYMEX finally closing at 59,37 US dollars, a new record.

The rise to new nominal highs in spite of the recent Organization of the Petroleum Exporting Countries decision to increase output by another half a million barrels to 28 million bpd, is forecasted to continue because of the lack of refining capacity, according to market analysts.

The beginning of the United States summer holidays with gasoline demand 3% higher, and China's strong industrial demand have contributed to sustain the momentum increase in oil prices which so far in 2005 have risen 30%.

There are concerns that refiners will not be able to meet spiralling demand for oil in the second half of the year with US stocks running below average.

But the latest surge has also been influenced by events in Nigeria where the United States, British and German consulates in Lagos have been closed after receiving threats from Islamic militants. Besides, last week several Shell oil workers in Nigeria were kidnapped and released on Sunday.

In Norway the world's third largest oil exporter, workers are threatening with a strike over pay dispute. Analysts believe that the combination of these factors plus market speculation could push the price to 60/65 US dollars per barrel range. Actually it's forecasted that the oil barrel will be above 60 US dollars from September to April 2006, amid concerns over the tight demand/supply balance.

OPEC said it's willing to consider a new increase in its output ceiling, less than a week after its latest similar decision, but Oil ministers have warned that the high oil prices blame can be found in the refinery sector constraints.