Wednesday, July 28, 2004

Man, when Morgan Stanley said they see a lot of "upside risks" on oil prices, they weren't kidding!
Crude prices shot to a 21-year high Wednesday as markets reacted to a threat by Russian authorities to shut down most of the production from that country's largest oil company.

September contracts of U.S. light crude spiked 3 percent to $43.05 a barrel on the New York Mercantile Exchange � the highest level since the exchange first began offering the light sweet crude contract in 1983. Prices eased slightly later in the day to $42.90, up $1.06 from Tuesday's close.
According to the FT today,
Yukos produces more than 1m barrels of oil a day, or more than 10 per cent of Russia's output.

Any fall in Russian oil production could push oil prices to record levels as global production is near capacity and is struggling to keep up with demand, which is rising at its fastest level in 24 years. . . .

The gains came just ahead of the latest weekly US commercial crude inventories, which are expected to show a dip in both crude and gasoline stockpiles.
Of course, pay no attention to any of this. The Democrats are in Boston, after all!

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