DCC chief executive Jim Flavin yesterday strongly denied involvement in any insider trading and said that to believe the Fyffes' claim, one would have to believe that he was "either a fool as well as a crook".
Oil prices scaled fresh records yesterday even as the Organisation of Petroleum Exporting Countries agreed to raise its official production ceiling by 500,000 barrels a day (b/d).
The 11-member cartel pledged an immediate 1.9 per cent rise in its overall quota to 27.5 million b/d and signalled that it could raise its output ceiling by another 500,000 b/d in spring if prices remained near current levels.
US crude oil futures hit a trading high of $56.70 a barrel yesterday, after weekly US petroleum product inventories declined.
The move by Opec followed an upward revision in its own demand forecasts as well as pressure from the US, its biggest customer.
US officials called several Opec ministers earlier this week to urge the cartel to help damp prices.
Yesterday, President Bush also expressed concern, saying that oil prices would be high on the agenda at the next Group of Seven meeting.
The US, the world's largest oil importer, spent $94 billio(€70 billion) on Opec imports last year, up more than a third on the previous year and accounting for more than half its oil imports.
Sheikh Ahmad Fahad Al-Sabah, Kuwait's energy minister and Opec president, said the decision was a pre-emptive move to meet a strong increase in demand expected in the second half of the year.
"Clearly, the latest price developments have shown that a careful rethink is required about the current state of the market, which appears to have undergone some structural changes recently," he said.
He added that the market had changed over the past two years, with demand growing at higher rates than in the previous decade, when annual consumption increased by an average of 800,000 b/d to one million b/d.
Opec delegates feared that if the cartel had kept production unchanged, oil prices could exceed $60 a barrel later this year. However, the immediate increase is largely seen as cosmetic since current cheating on quotas means that Opec is already producing around 27.7 million b/d.
Sheikh Sabah said a second increase in quotas in the spring would result in a real production boost of 300,000 b/d to 400,000 b/d. However, Opec delegates said all of the new production would be shipped to Asia, leaving none for the US.
The decision to increase quotas marks a significant change for Opec, which traditionally reduces supplies in the second quarter, as the weather warms and demand for fuel eases. - (Financial Times Service)
