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January 3, 2008 - 8:21AM
The price of oil on Wednesday hit 100 US dollars a barrel here for the first time, providing a new jolt to oil-dependent economies, particularly the United States.
New York's main contract, light sweet crude for February, briefly reached a record 100 US dollars per barrel in intraday trade before easing back. It closed up a hefty 3.64 US dollars from Monday's close at a record 99.62 US dollars.
Its previous all-time intraday high was 99.29 US dollars on November 21, followed by an all-time closing peak of 96.55 US dollars on November 23.
In London, Brent North Sea crude for February soared 3.99 US dollars to settle at a record 97.84 US dollars per barrel after hitting an intraday historic high of 98 US dollars.
Markets were closed Tuesday for the New Year holiday.
"Oil prices surged on the first trading day of the year on the back of cold weather and political violence in Nigeria and Algeria -- two OPEC members that have both been key sources of incremental US imports in the face of declining short-haul Mexican and Venezuelan supplies," said Antoine Halff, an analyst at Newedge Group.
The White House ruled out tapping the US Strategic Petroleum Reserve (SPRO).
"The SPRO is supposed to be used for emergencies. We know that markets work. And this president would not use the SPRO to manipulate, unless it was a true emergency," said spokeswoman Dana Perino.
US President George W. Bush "wants to increase supply. And doing a temporary release of the SPRO is not going to change prices very much. We know that from past history," said Perino.
The surge in oil prices drove US stocks lower. "As crude rallies, stocks continue to slide. The decline is broad-based, considering all sectors other than energy (up 0.5 percent) are posting a loss of 1.0 percent or larger," analysts at Briefing.com wrote.
Phil Flynn, an analyst at Alaron Trading, explained the factors supporting crude prices: "More violence in Nigeria, concerns about stability in Pakistan, oil-inventory expectations and good old-fashioned cold winter weather."
At least 12 people were killed over the New Year's holiday period in Nigeria's oil capital Port Harcourt, raising fears that crude output could be further reduced.
Violence by militants has reduced Nigeria's oil output by about a fifth since the start of 2006.
The unrest "raises concerns that a return to chaos could begin to disrupt international oil flows again," said John Kilduff at MF Global.
Elsewhere, an official report due Thursday was expected to show that crude oil inventories in the United States, the world's top energy consumer, have fallen for a seventh week in a row.
Falling inventories amid the northern hemisphere winter, the peak demand period for heating fuel, is helping to lift prices.
"Crude prices are drawing some support from (expectations of) a further decline in crude stocks in a weekly US inventories report," said Sucden analyst Andrey Kryuchenkov.
The price of oil on Wednesday hit 100 US dollars a barrel here for the first time, providing a new jolt to oil-dependent economies, particularly the United States.
New York's main contract, light sweet crude for February, briefly reached a record 100 US dollars per barrel in intraday trade before easing back. It closed up a hefty 3.64 US dollars from Monday's close at a record 99.62 US dollars.
Its previous all-time intraday high was 99.29 US dollars on November 21, followed by an all-time closing peak of 96.55 US dollars on November 23.
In London, Brent North Sea crude for February soared 3.99 US dollars to settle at a record 97.84 US dollars per barrel after hitting an intraday historic high of 98 US dollars.
Markets were closed Tuesday for the New Year holiday.
"Oil prices surged on the first trading day of the year on the back of cold weather and political violence in Nigeria and Algeria -- two OPEC members that have both been key sources of incremental US imports in the face of declining short-haul Mexican and Venezuelan supplies," said Antoine Halff, an analyst at Newedge Group.
The White House ruled out tapping the US Strategic Petroleum Reserve (SPRO).
"The SPRO is supposed to be used for emergencies. We know that markets work. And this president would not use the SPRO to manipulate, unless it was a true emergency," said spokeswoman Dana Perino.
US President George W. Bush "wants to increase supply. And doing a temporary release of the SPRO is not going to change prices very much. We know that from past history," said Perino.
The surge in oil prices drove US stocks lower. "As crude rallies, stocks continue to slide. The decline is broad-based, considering all sectors other than energy (up 0.5 percent) are posting a loss of 1.0 percent or larger," analysts at Briefing.com wrote.
Phil Flynn, an analyst at Alaron Trading, explained the factors supporting crude prices: "More violence in Nigeria, concerns about stability in Pakistan, oil-inventory expectations and good old-fashioned cold winter weather."
At least 12 people were killed over the New Year's holiday period in Nigeria's oil capital Port Harcourt, raising fears that crude output could be further reduced.
Violence by militants has reduced Nigeria's oil output by about a fifth since the start of 2006.
The unrest "raises concerns that a return to chaos could begin to disrupt international oil flows again," said John Kilduff at MF Global.
Elsewhere, an official report due Thursday was expected to show that crude oil inventories in the United States, the world's top energy consumer, have fallen for a seventh week in a row.
Falling inventories amid the northern hemisphere winter, the peak demand period for heating fuel, is helping to lift prices.
"Crude prices are drawing some support from (expectations of) a further decline in crude stocks in a weekly US inventories report," said Sucden analyst Andrey Kryuchenkov.
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