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Last Updated: Wednesday, 4 August, 2004, 20:23 GMT 21:23 UK
Oil slips as supply fears recede
Traders in crude oil futures in New York
Global markets have been hit by record oil prices in recent days.
Oil prices have pulled back from 21-year highs as fears over threats to supplies eased thanks to good news from Opec and debt-ridden producer Yukos.

The beleaguered Russian oil giant has been told by bailiffs that it is free to use its bank accounts to keep exports flowing and itself afloat.

Meanwhile, cartel Opec said it had the capacity to ramp up production by up to 1.5 million barrels a day.

The statement came despite earlier warnings that supplies were scarce.

The news sent US light, sweet crude down $1.32 at $42.83 a barrel, off record highs struck earlier of $44.30.

Brent crude fell 94 cents to $39.70 a barrel from an earlier high of $40.

As an addition to the news from Yukos and Opec, in its weekly data the US Energy Information Agency said gasoline stocks rose 2.4 million barrels last week to 210 million barrels.

Analysts had expected stocks to fall 600,000 barrels due to peak summer demand from vacation drivers.

Confusion

Only a day earlier Opec said it could not pump any more to cool prices, and that Saudi Arabia, the world's biggest exporter, had spare production capacity but could not raise output immediately.

"Opec continues to hold, at present, a spare production capacity of around one to 1.5 million barrels a day, which would allow for a immediate additional increase in production," Opec President Purnomo Yusgiantoro said in a statement on Wednesday.

"Furthermore, in response to expected future demand growth in the coming years, member countries have plans in place to further increase production capacity by around one million barrels a day towards the end of this year and in 2005."

World oil prices, already spooked by global terrorism fears, had been soaring over concerns that Opec was straining to meet rampant world demand with no capacity to pump any faster.

Attacks on a major Iraqi oil pipeline, combined with concerns over possible breaks in supplies from Russia and the Middle East, have sent crude oil prices soaring and stock markets reeling.


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