Record Oil Prices Fuel Protests, Violence

June 30, 2008
Price per barrel nears $144 as truckers in France block traffic in response to new highs.

Oil prices hit record high points close to $144 per barrel on June 30 as the dollar fell further amid a conference and protests staged in response to soaring crude, analysts said.

"The market remains well supported by the broad weakness in the dollar, ever increasing investor interest in commodities, persistent supply disruptions and geopolitical tensions," Sucden analyst Andrey Kryuchenkov said on June 30.

Crude futures have doubled in the past year and have risen by almost 50% since the start of 2008, when they breached $100 for the first time, triggering fears over inflation and slower economic growth.

Consumer countries blame record prices on tight supplies amid strong demand and unrest in producer countries such as Iran, Iraq and Nigeria. In particular, they accuse The Organization of Petroleum Exporting Countries (OPEC) of not producing enough crude.

OPEC insists that the weak dollar is at fault.

The dollar fell further against the euro on June 30, fueling demand for oil, which is priced in the U.S. unit, from traders holding stronger currencies, traders said.

On June 30, high fuel prices sparked protests among hundreds of truckers across France, blocking main highways and snarling commuter traffic around Paris.

Meanwhile leading figures in the oil world gathered in Madrid for one of the industry's biggest events, with the search for a remedy to record crude prices again stymied by division about the causes.

A week after failing to deflate the price of crude at a summit in Saudi Arabia, the world's biggest oil producers and consumers will get another chance during talks here to explore ways of calming tense global energy markets.

Pressure is mounting for a response to ease the pain of consumers suffering from high fuel costs and a general increase in the cost of living as crude prices soar.

One of the main points of contention is the role of speculators, blamed consistently by producer countries for the doubling of crude prices over the past 12 months.

Western oil chiefs, backing the view of governments in consumer countries, insisted on June 30 that speculators were the wrong target and that the failure of supply to match rising demand was the real cause.

Prices have also forged higher in recent weeks and months because of ongoing violence in Nigeria -- which is one of Africa's crude oil producers.

Production at Shell's main offshore oilfield in Nigeria has still not returned to full capacity after an attack by militants earlier this month, the Anglo-Dutch oil giant said on June 30.

Militants belonging to the Movement for the Emancipation of the Niger Delta attacked the Bonga platform located 75 miles offshore on June 19, forcing Shell to shut down production there and raising fears for the security of deep sea facilities in the region.

Copyright Agence France-Presse, 2008

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!