Oil Touches $100 a Barrel

Oil touched $100 today, extending last year's 57 percent rally, boosted by speculation U.S. stockpiles dropped to a three- year low last week. Unrest in Nigeria, Africa's largest oil producer, also spurred prices.
TradingEconomics.com, Bloomberg 1/2/2008 9:45:30 AM

Three-figure prices may bring energy costs near the tipping point that will cause global economic growth to falter. China has more than doubled oil use since New York crude dropped to this century's low of $16.70 a barrel on Nov. 19, 2001. That's soaked up most of the world's spare production capacity amid supply cuts in Nigeria, Iraq and Venezuela.

Crude oil for February delivery rose $4.02, or 4.2 percent, to $100 a barrel at 12:10 p.m. on the New York Mercantile Exchange, the highest since trading began in 1983.

Prices on Oct. 15 passed the previous all-time inflation- adjusted record. Measured in today's dollars, prices in 1981 rose as high as $84.73 after a decade of Middle East instability including the Arab-Israeli war in 1973, the Iranian revolution in 1979 and the Iran-Iraq war that began in 1980.

Oil embargoes and higher prices helped trigger recessions in developed countries, prompting efficiency drives that sent prices lower for two decades to as little as $10.35 a barrel on Dec. 21, 1998.

Soaring energy costs have so far failed to choke rising consumption in developing nations, led by China and India. Asia's developing economies will grow 9.8 percent this year, the International Monetary Fund said in its Oct. 17 World Economic Outlook report.