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| Version 1 | Version 2 |
|---|---|
| Oil reaches new records above $87 | Oil reaches new records above $87 |
| (about 5 hours later) | |
| Oil prices have hit record levels above $87 a barrel amid tensions between Turkey and Kurdish rebels in northern Iraq and output concerns. | Oil prices have hit record levels above $87 a barrel amid tensions between Turkey and Kurdish rebels in northern Iraq and output concerns. |
| In Tuesday trading, US light, sweet crude rose as high as $87.97 a barrel before easing back to $87.61, while Brent finished at $84.16. | |
| The continued upward curve followed reports that Turkish forces had shelled an Iraqi border village in recent days. | The continued upward curve followed reports that Turkish forces had shelled an Iraqi border village in recent days. |
| With global supplies tight, any threat to oil output is likely to hit prices. | With global supplies tight, any threat to oil output is likely to hit prices. |
| Economic impact | Economic impact |
| The Turkish government is preparing a motion seeking parliamentary approval for a military incursion into northern Iraq after 13 Turkish soldiers were killed close to the Iraqi border. | The Turkish government is preparing a motion seeking parliamentary approval for a military incursion into northern Iraq after 13 Turkish soldiers were killed close to the Iraqi border. |
| Ankara estimates that 3,500 Kurdistan Workers' Party (KWP) rebels - who want to see the establishment of an independent Kurdish homeland - are based across the border in Iraq. | Ankara estimates that 3,500 Kurdistan Workers' Party (KWP) rebels - who want to see the establishment of an independent Kurdish homeland - are based across the border in Iraq. |
| All the factors in the market are bullish Tetsu Emori, Astmax Futures | All the factors in the market are bullish Tetsu Emori, Astmax Futures |
| Analysts said Turkey's decision to ask for permission to pursue Kurdish rebels into Iraq fuelled fears that hostilities would disrupt oil supplies. | Analysts said Turkey's decision to ask for permission to pursue Kurdish rebels into Iraq fuelled fears that hostilities would disrupt oil supplies. |
| "Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned," said a commodity strategist at the Commonwealth Bank of Australia. | "Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned," said a commodity strategist at the Commonwealth Bank of Australia. |
| Oil prices have quadrupled since 2002 due to demand from fast-growing economies such as China and India, allied to instability in oil-producing nations in the Middle East and Africa. | Oil prices have quadrupled since 2002 due to demand from fast-growing economies such as China and India, allied to instability in oil-producing nations in the Middle East and Africa. |
| The cost of oil is still below the inflation-adjusted level of about $90 a barrel seen in 1980 when spiralling prices helped contribute to a recession in the US. | The cost of oil is still below the inflation-adjusted level of about $90 a barrel seen in 1980 when spiralling prices helped contribute to a recession in the US. |
| Analysts are divided over where prices will head next, although most believe the upward pressure on prices - driven by concern about the availability of supplies - is set to continue. | Analysts are divided over where prices will head next, although most believe the upward pressure on prices - driven by concern about the availability of supplies - is set to continue. |
| Predicting the future | Predicting the future |
| Further pressure on supplies came with news that oil producers outside the Opec cartel were to reduce output by about 110,000 a day. | Further pressure on supplies came with news that oil producers outside the Opec cartel were to reduce output by about 110,000 a day. |
| Last month, Opec said that it would be boosting its production by 500,000 barrels per day from the beginning of next month to cope with resilient global demand for oil. | Last month, Opec said that it would be boosting its production by 500,000 barrels per day from the beginning of next month to cope with resilient global demand for oil. |
| However, it has since added that demand for oil this winter in the US - the world's largest consumer of heating oil - will be stronger than previously thought. | However, it has since added that demand for oil this winter in the US - the world's largest consumer of heating oil - will be stronger than previously thought. |
| "It is very difficult to say what will happen next," said Tetsu Emori, commodity markets fund manager at Astmax Futures. | "It is very difficult to say what will happen next," said Tetsu Emori, commodity markets fund manager at Astmax Futures. |
| "All the factors in the market are bullish. There are no bearish factors except maybe that the market looks like it has been overbought, technically." | "All the factors in the market are bullish. There are no bearish factors except maybe that the market looks like it has been overbought, technically." |