New York light sweet crude settled at a then-record $48.70 a barrel on 19 August 2004, gaining $1.43 on the session and touching an intraday high of $48.75. London Brent crude for October delivery also closed at a record, rising $1.30 to $44.33.
The driver was armed conflict in the Iraqi city of Najaf, where Shiite militia loyal to cleric Moqtada al-Sadr were locked in a standoff with US-led Iraqi forces near the Imam Ali shrine. Iraqi Prime Minister Iyad Allawi issued what he called a final demand for the militia to disarm. An aide to al-Sadr told Al-Jazeera that residents of southern Iraq had set oil pipelines alight and threatened to burn oil wells. Exports from the country's southern terminals fell by roughly half, to about 40,000 barrels per hour.
Oppenheimer analyst Fadel Gheit attributed much of the price move to speculative positioning, arguing that hedge funds were pushing toward $50 intending to cash out. He said supply fears tied to Venezuela, a six-week Norwegian oil-worker strike, and the embattled Russian producer Yukos had all proved overstated.
President George W. Bush held firm against releasing oil from the Strategic Petroleum Reserve, which stood at 666.5 million barrels against a 700-million-barrel capacity he ordered filled in November 2001.
Historical summary. TurkishPress restated this AFP wire report, first published in August 2004, in its own words.