[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 24 June, 2005, 22:20 GMT 23:20 UK
Oil price hits $60 for second day
Oil rig
Producers say they are doing all they can to get oil out of the ground
Crude oil prices closed at new highs after hitting a record $60 a barrel for a second day, on concerns strong demand will continue over the coming months.

US light sweet crude touched the $60 mark overnight, and later closed 42 cents up at a new high of $59.84.

In London, the price of Brent crude gained 30 cents to $58.26, close to Monday's high of $58.58.

Analysts said that with the peak summer usage period due in the US, prices may be close to or above $60 for a while.

"It's a pretty key psychological mark," said Daniel Hynes, an analyst at ANZ Bank. "It will be important to see if it can establish itself above that level."

No respite

There are a number of factors underpinning the price of crude oil.

Oil analysts are worried that demand seems to show no signs of slackening off, despite an almost 40% increase in the price of crude oil since the start of 2005.

If anything, the global thirst for crude has increased as more and more drivers take to the road, some of the world's largest economies emerge from a slowdown and others look to stoke rapid expansion.

Oil production cartel Opec has been called upon to increase the amount of crude it pumps, but has repeatedly said that it is doing all it can to meet demand and cool price growth.

"We are worrying that the tendency is that [prices] will increase," said Purnomo Yusgiantoro, oil minister of Opec member Indonesia. "Oil demand will increase when facing summer and winter."


A report showing that China imported 8.2% more oil in May than in the same month a year ago also helped underpinned prices.

Supplies are likely to be tight as other booming economies also continue to glug crude, analysts said.

A report showed that China imported 10.41 million tonnes of crude oil last month, or 2.45 million barrels per day (bpd).

On top of that, there have been threats of disruption in Nigeria, and the spectre of a looming strike by oil workers in Norway.

Even though industrial action was averted, the market has remained jittery.

"There certainly does not seem to be much out there to really pull prices back down at the moment," Mr Hynes said.

See the frantic oil trading in New York

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific