Though oil prices fell on Friday, May 12, news of a blast that killed 200 people and destroyed an oil pipeline in Nigeria kept them from falling too far.
After the International Energy Agency released a reduced world oil demand forecast for the rest of 2006, prices for light, sweet crude on the New York Mercantile Exchange fell by more than a dollar.
However, The Associated Press reported that news of the Nigerian blast – which was blamed on vandals – kept oil prices from falling below $72 per barrel.
Though the IEA’s report said high prices and mild temperatures had curbed demand, particularly in the United States, the U.S. Energy Information Agency said that another Katrina-like hurricane could still send prices skyrocketing.
Reuters reported that Guy Caruso, administrator of the EIA, said in an energy conference on May 12 that there are still 300,000 barrels a day that are shut down in the Gulf of Mexico. Those areas are still vulnerable to more storms, with another busy hurricane season already predicted, Caruso said.
Most experts believe oil prices at $80 to $90 a barrel would be enough to trigger a recession, Reuters reported.