Oil prices retreat after record highs

Oil prices eased back below the $44 mark today after hitting fresh record highs.

News of a fire at an oil refinery in the United States had pushed the price of a barrel of crude in New York to $44.77, the highest level in 21 years, but this later fell back to $43.95.

In London, the cost of a barrel of Brent Crude also retreated after hitting a record $41.50.

The increases were the latest in a string of rallies that have pushed the cost of crude to new heights throughout the week.

Fears of terrorist attacks, disruptions to Iraqi crude exports, and financial troubles at Russia’s largest oil producer, Yukos, have all fuelled soaring prices.

Motorists have been warned to expect petrol to remain above 80p a litre for the “foreseeable future” as a result.

Today’s hike was sparked by news of a blaze at a unit of BP’s plant in Texas. Although the fire was quickly extinguished, analysts said it was enough to send oil prices rocketing.

Richard Slape, oil analyst at stockbroker Seymour Pierce, said the news helped the price edge up towards 45 dollars, although it was only a short-term factor.

He said: “There is not a great deal of spare capacity so when things like this happen it reminds people of the fragile state of the whole edifice at the moment. It creates a bit of nervousness and pushes the price higher.”

Middle Eastern oil cartel Opec said today that it may decide at its next meeting in September to increase its crude oil output by an additional 1.5 million barrels a day.

Opec president Purnomo Yusgiantoro said: “We are ready to add another 1.5 million barrels a day but will discuss it first during the next meeting in Vienna.”

He said Opec members, including Iraq, are currently pumping 30 million barrels of crude oil a day.