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Oil price still near record $142 | |
(about 10 hours later) | |
The price of crude oil has retreated slightly after hitting record highs above $142 a barrel, amid concerns that supply will not meet demand. | |
In London, Brent crude was trading at $140.16, having earlier hit $142.13. | |
New York light crude had climbed as high as $142.26 a barrel, but later fell back to $140.34. | |
Producers' group Opec has been under pressure to boost production, though recent reports have shown its members are split over whether to lift output. | Producers' group Opec has been under pressure to boost production, though recent reports have shown its members are split over whether to lift output. |
Libya has threatened to cut production because the market is well supplied. | Libya has threatened to cut production because the market is well supplied. |
Libyan threats | |
Libya's most senior oil official, Shokri Ghanem, said on Thursday he was looking into the possibility of cutting production in response to US threats against oil producers. | |
Analysts blame the price of crude on a variety of factors from basic supply and demand to hedge funds. | |
Opec has said speculators have played a part in the oil spike this year, but others are not convinced. | |
"We believe the factors driving oil prices higher are fundamental and not speculative," Deutsche Bank said in a research note. | |
"Oil needs to rise to $150 a barrel for oil as a share of global Goss Domestic Produce to reach the levels that occurred in the early 1980s," according to the bank. | |
But tensions between oil consumers and producers are rising. | |
The US House of Representatives has passed a bill that would allow the Justice Department to sue Opec members for limiting supplies. | |
But the bill has yet to be backed by the Senate and the White House has already said it would veto the bill. | |
There was also scepticism about whether there will actually be a cut in Libya, because of soaring prices. | |
"I doubt that any real effort in cutting output would be forthcoming, considering that pricing continues to hit new records," said Victor Shum, an analyst at Purvin & Getz. | |
'Radically new level' | 'Radically new level' |
Meanwhile, the chief executive of Gazprom, Alexei Miller, has been talking down the influence of Opec. | |
Saying that Opec had no real impact on prices, he told the Financial Times: "Not a single decision has been passed of late that would really influence the global oil market." | Saying that Opec had no real impact on prices, he told the Financial Times: "Not a single decision has been passed of late that would really influence the global oil market." |
He also said that the world was undergoing "a great surge in oil and gas prices, which will end with prices at a radically new level". | He also said that the world was undergoing "a great surge in oil and gas prices, which will end with prices at a radically new level". |
Mr Miller predicted that Gazprom would become the most influential company in the energy business. | Mr Miller predicted that Gazprom would become the most influential company in the energy business. |
On Friday, the firm approved the replacement of former chairman Dmitry Medvedev, who is now Russian president, with former prime minister Viktor Zubkov. |