World Oil Prices Still Strong

Oil prices on global commodity markets have remained high today off the back of ongoing fears of severe weather patterns in the Gulf of Mexico, which many are expecting to have an adverse impact on output.

Brent Crude trade in London hit a new high of $79.35 a barrel. whilst US light crude was down slightly to finish off the day at the astronomical heights of $81.62 in light of new fears of supply shortages over the immediate short term.

The Gulf of Mexico has already seen only 75% of capacity over the last few days as a result of predicted tropical storms, which could severely damage infrastructure and supply outages over the short term.

As a result, strong demand for oil has pushed the price up, and maintained it at record high level over recent day’s trading. Additionally, the news earlier in the week as to the continually dwindling US stock piles of crude reserves has further added upwards price pressure to the cost of a barrel, as has continued strong demand from India and China to fuel their economic expansion.

Whilst oil cartel OPEC have pedged to increase output by an extra half a million barrels a day as from November, analysts are worried that the combination of strong growing demand and intermittant supply and outages at refineries could dwarf the extra supply, which was designed to bring some stability into pricing.

The price of oil is crucial to the global economy, and high oil prices can lead to inflation on a global scale. Ultimately, events like storms in the vacinity of production platforms are only adding further weight to the problems facing world oil prices in the immediate future, and whilst it is predicted that the increase in output will have some effect towards the end of this year, analysts are hinting that it may not be significant enough to calm the upwards pressure.

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