Crude oil rose to a record $75 a barrel in New York today (April 21) on concern that shipments from Iran and Nigeria will be disrupted as the U.S. increases output of gasoline for the summer driving season.
Bloomberg.com reported that the standoff over Iran’s nuclear program has intensified, increasing the chances of sanctions against the world’s fourth- biggest oil producer. Rebel attacks in Nigeria have shut about 20% of output in Africa’s biggest oil producer. Oil was pulled lower in early trading on speculation that refiners will increase output because of improved profit margins.
“Any kind of supply disruption will send us up toward $100,” said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, whose clients have about $400 million in accounts at the firm. “Even without a hiccup we will see prices rise because of the supply-demand imbalances.”
Crude oil for June delivery rose $1.26, or 1.7%, to $74.95 a barrel at 1:40 p.m. on the New York Mercantile Exchange. Futures touched $75 a barrel, the highest for a contract closest to expiration since trading began in 1983. The May contract, which expired yesterday, reached records the last three days. Prices are 38 percent higher than a year ago.
Oil prices more than doubled in 1979 after a revolution in Iran slashed the nation’s oil exports. By February 1981 U.S. refiners were paying an average $39 a barrel for imported oil, according to Energy Department figures, or $86.88 in 2006 dollars.