World oil prices sustain record push

THE misery continued for motorists and policymakers yesterday as world oil prices continued their record-breaking rise and a leading industry watchdog warned demand was increasing more quickly than expected.

Trading on New York’s Nymex exchange took oil prices past the $54 watermark yesterday, reaching an all-time high of $54.45. London’s benchmark Brent crude tipped over $51 for the first time, reaching $51.50 in late trading.

Oil prices have soared almost 70% so far this year. Some analysts warned they were now within striking distance of $60, a once-unthinkable level that would mark a doubling of prices in less than a year.

Financial services firm PricewaterhouseCoopers said last week that global economic growth figures would suffer by as much as 0.5% if prices stayed around the $50 mark over the next 12 months. Yesterday marked the sixth day in a row of oil prices setting a new record.

The Paris-based International Energy Agency (IEA) had mixed news for oil observers with its latest monthly report on the oil market, which was published yesterday. The IEA said global demand for oil would reach an average of 82.4 million barrels per day this year, 0.3% more than it had originally predicted.

It blamed strikes in the oil producing countries of Nigeria, Norway and Brazil, as well as hurricanes in the Gulf of Mexico, which disrupted supply, for the hike in prices.

But it moved to calm fears over increased demand from China continuing to drive up prices.

The growth in Chinese demand eased off during July and August thanks to higher prices and the coming on-stream of new power generation that used other fuel sources, according to the IEA. The agency also cut its forecasts for demand in 2005 in response to slower economic growth patterns.

Closer to home, road hauliers warned of possible transport stoppages and demonstrations to highlight the effect of the oil price hike on their business.

Irish Road Haulage Association (IRHA) president Eamonn Morrissey said members were considering “direct action” if recent increases in excise duty on fuel were not reversed in December’s Budget.

The group will hold an emergency meeting later this month to consider imposing special fuel surcharges to pass on the effects of more expensive fuel to customers.

“As prices rise and the road transport sector is squeezed even tighter, the Government’s taxation policy must be looked at carefully,” said Mr Morrissey.

“Putting unnecessary pressure on a sector of industry on which every single person in the country relies is simply unreasonable,” he said.