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Crude oil prices at record high
BY A BUSINESS CORRESPONDENT
2 August, 2005: Crude prices surged to their record highs on Tuesday, following the death of Saudi ruler King Fahd on Monday. Saudi Arabia is the world's largest producer of crude oil. The death of the King added to fears of instability in global supplies of crude oil, pshing up crude prices to record figures.
Following a series of refinery problems including the refinery explosion at BP, prices of diesel fuel, heating oil and natural gas also went up.
The rising price of crude oil will put pressure on natural gas, and consequently, gas-fuelled power plants, stretching them. Besides, the aviation sector will take a beating if the prices stay high. The sector is already battered by the soaring price of aviation turbine fuel.
The benchmark US September delivery crude price shot up to $62.30 a barrel before settling at $61.57, up $1, on the New York Mercantile Exchange, the peak since the exchange began trading oil futures contracts in 1983. The earlier highest figure was $61.28 a barrel.
Many issues of global consequence, especially if they are connected to the oil-rich states have an immediate bearing on crude oil prices. In the current case, non one seriously believes that there will be any change in oil policy by the new king Abdullah, since he has been de facto ruler of the country since the late King was incapacitated by a stroke decade back.
The recent statement from Iran that the country will resume its nuclear quest has also fuelled apprehensions that disruptionin oil supply may be the price to pay for a standoff with the US. Iran is the second largest oil producer in Opec after Saudi Arabia.
BY A BUSINESS CORRESPONDENT
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