Oil Prices Reach $60 Limit

Written by Administrator

Tuesday, 21 June 2005

Despite production quota increases by the Organization of Petroleum Producing Countries (OPEC), uncontrollable increases in oil prices are causing concern. The oils prices reached $60 on Monday. The per barrel price of crude oil on international markets peaked at $59.10; creating high costs for Turkey importing oil in large amounts. According to official data, a dollar increase in crude creates approximately $300 million in additional annual costs for Turkey. The $60 limit will soon be surpassed and a new peak will be reached predicts a source close to the oil sector. Since the start of this year, oil prices around the world have increased 30 percent and it increased more than seven percent over the last one week. State Institute of Statistics (DIE) data indicated the April cost for Turkey increased 9.2 percent; this translates into a 79.6 percent increase in comparison to the same period last year. According to analysts, strong US demand evaporates commercial oil stocks; however, the skyrocketing prices have no impact on consumption. US Energy Department data proves that within the last four weeks, fuel consumption increased by three percent, jet fuel and diesel consumption saw a 6.5 percent increase. A high-level official in the sector predicts continuing price increases. The same source also says this negatively affects Turkey and the high prices in the petroleum sector have turned it upside down. Crude oil prices have reached the level of $58.60 on the New York Stock Exchange on June 18, breaking a new record. The former record was $58.28. This figure rose again, closing at $59 yesterday. Meanwhile, OPEC President Sheikh al-Fahd al-Sabah announced about overviewing the situation on Friday at a meeting with the oil ministers, and there are plans to increase the daily quota by 500,000 barrels if the crude oil prices insist on continuing to skyrocket. The cartel during last week's meeting in Vienna, declared that daily production at 28 million with a 500,000 barrel increase. If oil prices remain high, the daily quota will be increased again cartel assures.

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