Global crude oil prices reached historic levels on 17 August 2004, with New York's light sweet crude for September delivery closing at $47.37 a barrel, then climbing further to $47.50 in after-hours electronic trading. Brent North Sea crude for October settled at $43.03.
A ceasefire agreement in which Shiite militia leader Moqtada Sadr agreed to disarm and vacate a holy shrine failed to calm markets. Traders focused instead on falling US crude inventories: stockpiles for the week ending 13 August dropped 1.3 million barrels to 293 million, while gasoline stocks fell 2.6 million barrels to 205.7 million, according to the Energy Department.
Analyst Marshall Steeves of Refco cautioned that the market was pricing in fears of shrinking spare capacity, putting $50 per barrel within reach. Shiite militia threats had already cut crude exports from Iraq's southern terminals by roughly half for a week.
Troubled Russian oil company Yukos also kept pressure on prices. Reports in several major financial newspapers indicated Yukos had sold a majority stake in a Siberian natural gas firm to TNK-BP for $357 million, a move aimed at covering its substantial tax liabilities. Yukos produces approximately 1.7 million barrels per day. A report from OPEC projecting sufficient supply through 2005 was largely dismissed by the market.
Historical summary. TurkishPress restated this AFP wire report, first published in August 2004, in its own words.