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Oil Prices Reach New High

By Bob Ewing     Aug 1, 2007 in World
Oil prices have reached a record high amid concerns that disruptions in Nigeria and the North sea will interfere with supply. The price of a barrel of sweet crude is now 78.71 up 31 cents from the previous high in 2006.
Industry concerns, about whether or not oil supplies can meet the global demand, have driven oil prices to a record high. BBC News reports that oil prices have climbed to a record high of $78.71 a barrel.
The previous high for a barrel of US light, sweet crude was 78.40 and was reached in July 2006. Over the past few weeks prices have been steadily rising and the rise has been attributed to the disruption caused to the output in Nigeria and the North Sea.
To make matters worse, the Department of Energy has stated that oil inventories have fallen by a higher-than-expected 6.5 million barrels in the week ending 27 July. It was predicted that the fall would be more in the range of 700,000 barrels.
Positive signs in the US economy have encouraged the oil markets to withstand the recent turbulence in the stock market. The increased output by OPEC members has not reduced the traders’ worries about the amount of spare capacity in the market amid robust demand and continuing instability in oil-rich Nigeria.
"The market is looking closely at the unexpected large draw in crude stocks, These numbers are enough to keep the crude rally alive." Jim Ritterbusch, president of energy analysts Ritterbusch and Associates.
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