20-08-04 Speculative investors, including hedge funds, have helped fuel the recent surge in oil prices on the New York Mercantile Exchange, amid strong global crude oil demand and tumbling US stock prices.
"There's a high possibility that the crude oil price will break the $ 50 mark if the situation in Iraq further deteriorates," a market source said. China said that crude imports to the "world's factory," which has been wooing foreign manufacturers, increased a hefty 40 % during the January-July period this year, indicating the growing global demand for oil.

Saudi Arabian Petroleum and Mineral Resources Minister Ali Al-Naimi said that the world's largest oil producer still had 1.3 mm bpd of reserve production capacity. However, some analysts are sceptical.
"Saudi Arabia's production capacity has proved to be insufficient," a US oil analyst said. "It won't be able to deal with concerns over oil supply." The crude oil market has been highly volatile.
One trader said, "Any situation that could lead to uncertainty over the oil supply is a 'buy.'"

An explosion at a British Petroleum refinery in Whiting, Indiana, helped push the September light sweet crude contract to a record $ 46.65 a barrel on the NYME on the day. The administration of US President George W. Bush is increasingly concerned over soaring oil prices, which could deal a fatal blow to the administration in the lead-up to the November presidential election.
US Treasury Secretary John Snow expressed concern over the psychological effects of surging oil prices on consumer spending and corporate performance, pointing to the adverse impact on the US economy. As part of its efforts to alleviate the price hikes, a high-ranking official of the Bush administration recently asked the Russian government to deal carefully with Moscow's biggest oil exporter, Yukos.