Oil prices soared back to six-month highs yesterday as Opec, the oil producers' cartel, said it was powerless to control a speculative surge on the back of the crisis in the Middle East.
Ali Rodriguez, the secretary-general of Opec, said that current levels of crude oil supply by the 10 member nations were "satisfactory". "We have to wait and see the situation because if we increase production now and the situation returns to normal maybe we can face a collapse of prices," he told BBC radio.
"Maybe somebody has to act in order to correct the high level of speculation," Mr Rodriguez said. Asked what can be done, he said: "I don't know. Because this is absolutely out of our control."
Opec, which cut production by five million barrels a day to counter the effect of the economic downturn, is due to hold a meeting in June to decide production policy for the second half of 2002.
In London the price of a barrel of Brent broke through the $28 barrier, rising as much as 88 cents, or 3.2 per cent. Markets were also jolted by an Israeli military assault on the compound of Bethlehem's Church of the Nativity. However, economists believe figures released on Wednesday, which showed stocks in the US are running 8 per cent higher than a year ago, point to a fall in the oil price in the medium term. Adam Sieminski, of Deutsche Bank Securities, said: "First Iraq and now Israel/Palestine have added a $6 per barrel premium to oil prices beyond what we think supply, demand and inventories warrant."
The price of gold, widely considered a safe haven in times of political turmoil, stumbled yesterday as speculative selling after a recent surge pushed the metal briefly below the key level of $300 a tonne.Reuse content