Crude oil inches closer to $ 100 a barrel

Crude prices set a new record high of $88 a barrel having risen by eight dollars in two weeks in what traders attributed to tensions in northern Iraq and strong demand in America.

At $88, crude price is edging towards the $100 mark that analysts, led by investment firm Goldman Sachs, had earlier predicted it would hit before year-end.

The latest adjustment came only a few days after Jacob Segman, the managing director at oil marketing firm Kenol/Kobil, warned consumers to brace for further price increases due to continued rise in crude prices.

“Consumers should brace for further price increases, they can only reduce if crude prices fall,” Segman said. He added that the sharp rise in freight costs would also put an additional strain on pump pricing..

Kenya Shell reckons that the current crude prices are yet to reflect at the local pump stations but that it could happen in the next few weeks.

“We are monitoring how crude prices will go, and we will definitely move along with it,” says Mwaura Ngaari, the external affairs manager at Kenya Shell.

Oil marketers say the current pump prices are based on crude prices bought in September when the average cost stood at below $77 per barrel, suggesting that the next load would come at a higher price.

Oil marketers tender monthly for oil importation in a system dubbed Open Tender System (OTS), where one marketer imports crude oil, which is only enough to last a month.

Business Daily Nairobi