The price of oil in New York and London hit new highs this afternoon after data in the US showed a bigger than expected fall in petrol stocks. This added to existing tension about a possible conflict between the US and Iran.
In London, the price of Brent North Sea crude oil hit $73.34 a barrel and in New York the price of light sweet crude for delivery in May rose to $71.80.
News of falling US petrol inventories fuelled market jitters ahead of the US summer driving season when demand for petrol soars as holidaymakers take to the roads.
The US Department of Energy revealed today that US petrol stockpiles sank by 5.4 million barrels last week, twice as much as analysts had expected. The news added to heightened concerns over Iran's disputed nuclear ambitions with oil traders concerned about the consequence of a conflict between the US and Iran.
Adjusted for inflation, current oil prices remain below levels reached after the 1979 Iranian revolution. According to Barclays Capital, in November 1979 crude prices surged to a high of $87.23 per barrel in today's money.
The International Monetary Fund said today the impact of higher oil prices on the global economy was a growing concern, and the full effects of the surge in energy prices had yet to be felt. It called on US officials to consider higher petrol taxes to curb oil consumption.
On Tuesday, the US failed to secure international support for targeted sanctions against Iran and President George W Bush refused to rule out nuclear strikes if diplomacy failed to curb the country's atomic programme.
