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International Oil Price at 13-year High at $38

Posted March. 18, 2004 22:44,   


Due to the expansion of terror intimidation and the instability of the oil production, the international price of oil in both the actual and futures market has reached its highest point in 13 years and five months.

According to this movement, the government has entered a “Quasi-emergency state” to carry out level one energy countermeasures, such as recommending that car owners suspend one-tenth of automobiles per day from movement.

According to Korea Oil Corporation on March 18, the price of Western Texas’ WTI in the local market was up $0.73 from that of the previous day, to reach $38.18 per barrel. This is the highest level since that of $38.87 per barrel on October 16, 1990, just before the breakout of Gulf War.

Brent Oil has also finished the market at $34.41, hitting the highest point since November 15, 2000 at $34.50.

The oil price has also shown strong tendencies in the futures market, with April’s delivery up $0.70 to $38.18, reaching its highest point since October 16, 1990.

This skyrocketing oil price can be attributed to anxieties about the unbalance of supply and demand that can linger on, due to the decreased amount of US-produced oil inventory and the possibilities of terror expansion.

According to the report of the U.S. Energy Information Agency, the amount of volatile oil in inventory this week has decreased 800,000 barrels from that of the previous week. In the case of crude oil, 900,000 barrels decrease was reported.

As the oil price soars, the Ministry of Industry and Resources disclosed on March 18 that it has decided to invoke the energy countermeasure level one.

The major contents of this countermeasure consist of recommended suspension of one-tenth of all automobiles from movement, inducing 2,157 large energy consumers such as a department store to reduce electricity consumption, carrying out a program to reduce the consumption of natural gas, and inducing entertainment and sports facilities to reduce electricity consumption at night.

Of the three energy countermeasures, the second level was invoked last February.

Ki-Jeong Ko koh@donga.com