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| Version 1 | Version 2 |
|---|---|
| Oil price increases to new record | Oil price increases to new record |
| (about 4 hours later) | |
| The price of oil has hit a new record on the back of supply worries after bad weather hit Mexican oil exports. | The price of oil has hit a new record on the back of supply worries after bad weather hit Mexican oil exports. |
| US light, sweet crude oil rose 72 cents to $112.48 a barrel, above the previous record of $112.21. Brent crude rose 41 cents to $110.25 a barrel in London. | US light, sweet crude oil rose 72 cents to $112.48 a barrel, above the previous record of $112.21. Brent crude rose 41 cents to $110.25 a barrel in London. |
| Bad weather led Mexico - a key supplier to the US - to close ports that deal with 80% of its oil exports. | Bad weather led Mexico - a key supplier to the US - to close ports that deal with 80% of its oil exports. |
| Comments by Russia's leading oil firm suggesting output from the country may have peaked also concerned traders. | |
| Russian peak? | |
| A surprise fall in Russian oil output in the first part of the year has raised fears over the ability of global supply to keep pace with demand over the next decade. | |
| Russian production averaged 10 million barrels a day in the first three months of 2008, down 1% on the same period last year. | |
| Blamed on supply problems in Western Siberia and weather conditions making it harder to move drilling equipment, the fall contrasts with substantial output rises in recent years. | |
| In an interview with the Wall Street Journal, a senior executive with Russian oil firm Lukoil cast doubt on whether output could continue to increase. | |
| According to vice president Leonid Fedun, investment of $1 trillion in new reserves will be needed over the next 20 years to maintain output at current levels. | |
| Oil prices have risen sharply in recent months | |
| Once highly productive fields in Siberia are slowly being exhausted and the huge cost of searching for oil in the untapped but remote region of eastern Siberia has deterred firms. | |
| "When the well's productivity falls, you have to keep drilling more and more," Mr Fedun said, referring to the steady depletion of older fields. | |
| "You have seen it in Alaska and the Gulf of Mexico and now you are seeing it in Siberia." | |
| Analysts at Citigroup recently said annual increases in Russian output could "no longer be taken for granted", while arguing that production was expected to rise until 2012. | |
| 'Shrinking cushion' | |
| Russian worries underline longstanding concerns about whether there is enough oil to meet the needs of the global economy, particularly fast-growing China and India. | |
| "The supply is so tight that any supply problems cause real concern" said analyst Robert Nunan at Mitsubishi. | "The supply is so tight that any supply problems cause real concern" said analyst Robert Nunan at Mitsubishi. |
| "We just don't have the big cushion any more that we used have, so it's much easier for money to come in and prop up prices now." | "We just don't have the big cushion any more that we used have, so it's much easier for money to come in and prop up prices now." |
| Another factor helping to push up oil prices in recent weeks has been the continued weakness of the dollar, prompting investors to place their money in commodities instead. | Another factor helping to push up oil prices in recent weeks has been the continued weakness of the dollar, prompting investors to place their money in commodities instead. |
| One dollar traded at 101.16 yen in Tokyo on Tuesday while one euro was equivalent to $1.5825. | One dollar traded at 101.16 yen in Tokyo on Tuesday while one euro was equivalent to $1.5825. |