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By Baeau Tai

PORT MORESBY, Papua New Guinea (The National, Aug. 17) - Papua New Guinea's Kutubu crude price recorded a new peak above US$40 (K128.82) in the second week of The Kutubu crude started the month at US$36.67 per barrel and ended at US$42.51, an increase of US$6 or 16 percent. The average for July is US$39.76, which is up by US$3.16 or 8.6 percent compared with June's 2004 average of US$36.60.

July 2004 and continued to rise throughout the month.

July Kutubu prices were the highest ever recorded since commercial production started 12 years ago, the Petroleum Department said in its July Oil Price Report.

"High crude oil price is very good for PNG, given that our production levels are low and the higher prices would mark up the balance in the revenue, but with refined products, the high oil prices will cause further increases in the refined fuel prices," Petroleum Secretary Joseph Gabut said yesterday.

Last Friday world oil prices rose to all-time highs as a hurricane thundered near oil platforms, oil-rich Venezuela faced a strike risk and strife raged in Iraq.

New York's benchmark light sweet crude for delivery in September leapt US$1.08 to a record high settlement of US$46.58 a barrel. It spiked at an all time high of US$46.65.

London's Brent North Sea crude oil for September soared US$1.59 to a record finish of US$43.88 a barrel after hitting an all time high of US$43.92.

Mr Gabut said even last month, world oil prices hit records high on doubts over supplies from Russia and Iraq and doubts over OPEC's ability to make up for any shortfall.

"The expert analyses have said that prices will continue to rise this year if the mentioned problems remain, because of the strong increasing global demand," Mr Gabut said.

PNG's crude oil production last month was approximately 1.262 million barrels, which is about 13 percent lower that the corresponding July 2003 figure of 1.458 million barrels. Between June and July 2004, there was a slight decrease in production of 41,815 barrels.

"The overall decline in production continues to reflect the natural decline in the Kutubu and Gobe oil fields," said Mr Gabut.

PNG's crude oil exports for the month totalled 1,187,758 barrels. With the average Kutubu price for the month around US$39.76, the gross value of PNG crude oil exports in July was approximately US$47.2 million (K152 million).

August 18, 2004

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