Crude oil rises to record level

| Tuesday, August 03, 2004

Crude oil rose to a record price Tuesday, Aug. 3, for the second day in a row, with futures reaching more than $44 a barrel at one point.

On Monday, Aug. 2, oil for September delivery was selling at $43.80 a barrel on the New York Mercantile Exchange. That was the record price until the following day.

Many analysts have attributed recent record-high prices to troubles involving the Russian oil company Yukos, which is currently engaged in a battle with the Russian government. The company’s leader, Mikhail Khodorkovsky, a political foe of Russian President Vladimir Putin, is currently charged with tax evasion and fraud. The company is also facing massive payments for back taxes.

Oil prices shot up last week on news that the Russian firm might stop production.

The situation in Moscow was compounded when wire services reported that an OPEC official said the multinational oil producers’ organization could do little to slow the increase in prices.

And as the raw materials were rising in price, the finished product was running up as well.

The Department of Energy reported Aug. 2 that the national average U.S. retail price of diesel fuel had increased to $1.780 from the previous average of $1.754. Regional prices ran as high as $2.115 a gallon in California to $1.717 in the Lower Atlantic region, the lowest in the nation.

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