Oil jumped 23 percent this year to about US$75 a barrel on speculation the dispute over Iran's nuclear program will disrupt Persian Gulf exports and concern hurricanes may again reduce Gulf of Mexico supplies. World oil consumption will rise 1.5 percent to 84.9 million barrels a day, according to the International Energy Agency.
"More and more we are confident that prices will hit or exceed our forecast," said Kevin Norrish, a director of commodities research for Barclays Capital in London who expects oil to average US$68 a barrel in 2006. "In the short term things look tight, and in the longer term there are a lot of question marks."
On Wednesday, oil for August delivery touched US$75.40, a record intraday price on the New York Mercantile Exchange. Oil was at US$75.11 a barrel in after-hours electronic trading on the exchange yesterday at 8:03am London time.
Analysts have been playing catch-up with surging oil prices. They started this year with a forecast of US$58 a barrel, below the US$67.13 average price through the first six months.
The International Energy Agency in Paris, adviser to 26 oil-consuming countries, said in a June 13 report that supply from outside the Organization of Petroleum Exporting Countries is coming more slowly than expected. The forecast for a 1.5 percent increase in global demand compares with a 1.3 percent gain last year and a 4.1 percent jump in 2004.
Oil is likely to average US$67.65 a barrel in the third quarter, according to the survey. The market will be bolstered by the Atlantic Ocean hurricane season, which lasts from June through November. Hurricanes threaten US Gulf of Mexico production platforms and refineries along the coast.
