New York : The price of crude oil has now reached the record mark of $100 a barrel, riding a wave of global fuel demand.
The price for a barrel – 159 litres – for delivery in February reached exactly $100 Wednesday afternoon on the New York commodities market.
The price gain, following the 57 percent increase in 2007, was boosted by expectations that US stockpiles had dropped to a three-year low last week, by the weakness of the US dollar and by unrest in Nigeria, Africa’s largest oil supplier.
“This is the culmination of everything that we talked about last year,” John Kilduff, vice president of risk management at MF Global Ltd. in New York, was quoted as saying by Bloomberg financial news service.
“Various geopolitical problems have deteriorated overnight, in particular Nigeria and Pakistan. Commodities, and in particular oil, have become safe havens in a dangerous world.”
China has more than doubled oil demand since November 2001, when crude oil prices had dropped to $16.70 a barrel. Supplies have been cut from Nigeria, Iraq and Venezuela.
The $100-price was the highest since 1981, when prices rose to 84.73 inflation-adjusted dollars. Those high prices sparked a drive for efficiency, which lowered prices until rising economic affluence in China, India and elsewhere in the developing world started to again push up prices.
Asia’s developing economies are expected to grow 9.8 percent in 2008, the International Monetary Fund has said.
The dollar’s 11-percent slide in 2007 against the euro has also boosted prices because it made commodities cheaper for buyers outside the US.
In Nigeria, Royal Dutch Shell has shut down 500,000 barrels of its daily output – about one-quarter of Nigeria’s total – due to attacks and kidnappings by militants on foreign installations and workers.