Oil prices soared to a record $100 a barrel Wednesday in New York before falling back, as worldwide demand for oil continues to grow. Surging economies in China and India have helped push oil prices higher over the past year -- and tensions in oil producing nations such as Nigeria and Iran have added to speculation that global demand will continue to outstrip supplies. VOA's Mil Arcega reports.
Light sweet crude for January delivery rose more than four dollars a barrel Wednesday to push the price of oil to more than $100, before easing to $99.61 at the close. The milestone comes after weeks of price increases driven by continuing tensions in several oil producing nations.
Although speculative concerns about supply disruptions have yet to materialize, that has not stopped buyers from driving prices higher.
The White House acknowledges higher prices have hurt some consumers. But Press Secretary Dana Perino says the president will not tap into the nation's Strategic Petroleum Reserves (SPR) to send prices lower. "Doing a temporary release of the SPR is not going to change prices very much. We know that from past history."
The reserves currently contain almost 700 million barrels of oil to be used in the event of an emergency. Perino says the president's plan for 2008 is to continue pushing Congress to pass laws aimed at reducing America's dependence on foreign oil and increase the consumption of alternative fuels such as ethanol. "We have to figure out a way to increase supply here in the United States, done in environmentally sensitive ways, which we know how to do, so that we can have an increase of supply of oil here, while world demand continues to increase."
Analysts say high oil prices reflect the strong and growing global energy demand in China and India and insufficient investment in production.
Despite the psychological and historical impact of $100 a barrel oil, analysts say oil prices are still within the range of inflation adjusted highs that were set in 1980.