World economy

Price of oil approaches record 120 dollars per barrel

Article published on the 2008-04-23 Latest update 2008-04-23 12:21 TU

Petrol prices rising
(Photo : AFP)

A weak dollar and a fall in production in Nigeria are pushing the price of crude oil up in London and New York. The oil cartel Opec calls for calm and Saudi Arabia says the world is not running out of oil. The decline of the dollar has pushed up demand.

The price of oil has stalled today after coming close to 120 dollars per barrel on Tuesday. In New York prices were quoted at 118 and 119 dollars a barrel with London's prices at 116 dollars. Demand for oil increased as the dollar fell against the euro, making prices more attractive for foreign buyers but also pushing up prices.

In Rome yesterday, 74 attended the International Energy Forum and expressed concern at the impact of oil prices on consumers. Saudi Arabia's petroleum minister, Ali al-Naimi, called for calm and said the world was not running out of crude oil. He described the current crisis as an investment issue rather than an energy resource problem.

Opec, which groups the world's oil-producing countries, said yesterday it was planning to increase production by five million barrels per day by 2012 and by nine million barrels by 2020. Current Opec production is at 32 million barrels per day.

Meanwhile Royal Dutch Shell reported that its output had dropped by 169,000 barrels per day after one of its pipelines was sabotaged in Rivers State in southern Nigeria. Responsibility for the attack on the pipeline is claimed by the Movement for the Emancipation of the Niger Delta (Mend).

RFI's correspondent Ben Shemang says Mend criticises "continued injustice" in the region and called for the dropping of gun-running charges against their leader, Henry Okah. The militants say attacks will continue as part of what they term "Operation Cyclone" in an attempt to cripple Nigeria's oil exports.

In the US, the Pentagon expressed concern yesterday about the rise in oil prices, pointing out that for every dollar increase its annual budget goes up by 130 million dollars.