Oil nears USD 60/barrel

Oil prices neared USD 60/barrel on Monday, hitting USD 59.37 as traders priced in the risks to supply posed by a possible labour strike in Norway and security concerns in Nigeria.

December futures have already risen above USD 60.

As the US moves closer to the summer driving season, when demand for car-fuel rises, statistics show that US crude oil stocks at a 6-year high.

But markets are worried that demand is also picking up in both the US and energy-hungry China and India and capacity at refineries is tight.

The markets barely responded last week to OPEC raising its production quotas by 500,000 barrels/day last week to 28 mln and OPEC is now considering another 500,000 increase.

Talk is now of oil prices at USD 70 or more. However, analysts point out that in inflation-adjusted terms, prices would have to reach USD 90/barrel to reach equivalent peaks of the early 1980s.