U.S. Oil Price Hits $40 For First Time Since 1990
The price of oil hit $40 a barrel for the first time in over 13 years on fears of terrorist strikes in the Middle East and U.S. gasoline shortages, traders said, in a report on May 7 on CNBC TV. The price of light sweet crude for delivery in June spiked up to the symbolic $40 threshold briefly just minutes after the opening of trading, but failed to sustain the move. The last time prices were so high was in October 1990 after Iraqi troops rolled into Kuwait. The contract later stood at $39.54, up 17 cents from the previous close. Crude prices were also being infected by a feverish gasoline market, with fuel stocks low ahead of the so-called "summer driving season" in the United States when motorists flock to the roads, analysts said. Economists warned that surging oil prices were darkening an otherwise optimistic outlook for the U.S. engine of global economic growth. "The high energy prices we're seeing today are unwelcome and they're unhelpful," U.S. Treasury Secretary John Snow said. "We've leaned strongly against any actions on the part of OPEC to restrict supply, to reduce output, to reduce the quotas," he told CNBC television. However, OPEC president Purnomo Yusgiantoro of Indonesia said earlier this week members of the cartel were exceeding their production ceiling by 1.5 million barrels a day.