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Last Updated: Wednesday, 5 May, 2004, 22:38 GMT 23:38 UK
Oil soars despite overproduction
An oil worker at the Shuaiba refinery near Basra
Opec's members are keeping the taps open - but prices remain high
Oil prices have hit a fresh 13-year high despite an admission from the oil cartel Opec that its members are still pumping way beyond their quotas.

Wednesday night's close in New York saw oil costing $39.57 a barrel, the highest level since the 1990 Gulf War.

The price is blamed on tight supplies in the US and the fear that violence in the Middle East will intensify.

Opec officially has a target of $22-28 a barrel, but its own "basket" price has been way above that for months.

The basket price is about $34, while June Brent crude - the main European benchmark - ended up 79 cents at $36.72 a barrel after touching a high of $36.90 - the highest price for a Brent contract since it hit $37.10 a barrel on 17 October 1990.

Up or down?

Even so, Opec cut production at the beginning of April by a million barrels per day (bpd) to 23.5 million, after many of its 11 members complained that the falling dollar outweighed price rises as far as their revenues were concerned.

But according to the organisation's president, Purnomo Yusgiantoro, about 1.5 million bpd are still being pumped beyond the quota.

That, he hinted to reporters in Jakarta, meant a rise in the quota in June was unlikely.

Many traders and economists are concerned about the possible effects of continuing high prices on the global economy.

The pressure on oil prices from security fears - exacerbated by the killing of five foreign workers in Saudi Arabia over the weekend - has been added to by rapid economic growth in China and India.

Graph of Brent crude oil prices

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