Crude oil prices set new record highs

| 4/18/2006

The price of light, sweet crude oil set a new intraday high in trading on Tuesday, April 18.

On the New York Mercantile Exchange, trading reached a high of $71.45 per barrel after closing at a record of $70.40 per barrel the previous day. That broke the previous intraday high of $70.85 per barrel, set on Aug. 30, 2005.

Meanwhile, in London, prices for North Sea Brent crude jumped 74 cents to an all-time high of $72.20 per barrel.

The Associated Press reported that experts are blaming the increases on a number of factors, including the ongoing conflict in Iraq, escalating tensions between the U.S. and Iran, and supply disruptions caused by violence in Nigeria.

The Organization of Petroleum Exporting Countries issued a report on April 18 showing a decrease in its demand forecast for 2006. Demand for the rest of the year is now expected to increase by 1.42 million barrels a day, rather than the previously forecast 1.46 million barrels per day.

However, The AP reported that this news did little to rein in the increase in oil prices on the trading markets. In fact, analysts told The AP that the markets remain jittery because crude oil production is barely keeping up with world demand, leaving little room for error if there is a prolonged supply disruption.