The price of a barrel oil rose to $77.86 in the USA yesterday in response to attacks on Mexican gas pipelines.
The series of explosions on Monday, disrupted industrial supplies and alarmed world financial markets. The price of Brent Crude also rose, ending at 75.76 a barrel.
The attacks were claimed by a left wing guerrilla group called the EPR, or People’s Revolutionary Army.
At least a dozen pipelines were hit: though only one of them carried oil and Mexican officials have stated that the attacks will not hit the country's oil output, they have cut off a quarter of its natural gas supply. This has seriously affected local industry and drawn attention to the country’s vulnerability as an energy source.
At least one undetonated explosive device was later found beside a pipeline in a swampy area about 500 yards away from a highway toll booth just north of the port of Veracruz. This was accompanied by a note signed by the EPR, a shadowy dissident group that took credit for the attacks, claiming they are part of a "prolonged people's war" against "the anti-people government".
The oil price rises reflect concern that the attacks may be part of a long term problem. Though Mexico is not a member of the Organization of Petroleum Exporting Countries (OPEC), the grouping which controls 40 percent of world supply is meeting today in Vienna to set its output target for the rest of 2007.
It is expected maintain its current ceiling because of ample supplies and the prospect of slowing US demand, according to the chairman of Libya's state-run National Oil Corporation, Shokri Ghanem.
September 11 2007