P.M. BRIEFING : EC Calls Oil Prices ‘Unjustified’

Recent sharp hikes in oil prices during the Persian Gulf crisis are the “totally unjustified and indefensible” result of speculation at consumer expense, the European Community’s top energy official said today.

Oil prices have doubled since Iraq invaded Kuwait Aug. 2. The widely traded North Sea Brent, which rose to a decade-high price of $40.40 a barrel Monday, was being quoted midday today at $40.70 a barrel on the European spot market. On the New York Mercantile Exchange, the U.S. benchmark West Texas Intermediate crude for November delivery was up 40 cents over Monday’s close to $38.65 a barrel.

“The increases in oil prices yesterday and in the past few weeks are totally unjustified and indefensible,” said Antonio Cardoso e Cunha, the EC energy commissioner. The loss of oil production from Iraq and Kuwait has been made up by higher production elsewhere, he said, so oil stocks in Europe and other regions are “unusually high.”