Oil price hits 21-year high

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The Independent Online

The cost of oil rose to yet another 21-year high today after a fire at a refinery in the United States sparked fresh concerns over supplies.

The cost of oil rose to yet another 21-year high today after a fire at a refinery in the United States sparked fresh concerns over supplies.

News of the blaze in Texas pushed the price of a barrel of crude in New York to 44.73 US dollars, 32 cents up on yesterday's record closing price of 44.41 dollars.

In London, the cost of a barrel of Brent Crude hit 41.35 US dollars, the highest level since trading started in 1988.

Motorists have been warned to expect petrol to remain above 80p a litre for the "foreseeable future" as a result of recent highs.

Although the fire, which closed a unit of BP's plant in Texas, 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."

Today's hike is the latest in a string of rallies which have pushed the cost of crude to new records throughout the past week.

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

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.

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