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Alaska Oil Prices Set Mark at $60 a Barrel

Posted on: Saturday, 6 August 2005, 21:00 CDT

ANCHORAGE, Alaska - Refinery breakdowns across the United States and declines in gasoline inventories have helped push Alaska's oil prices above $60 per barrel for the first time.

North Slope crude oil delivered to West Coast refineries settled on Friday at $60.26, up 93 cents from the day before.

High oil prices are a mixed blessing for Alaskans. The state's income is growing on higher-than-expected oil tax and royalty collections, but pump prices are well above $2 a gallon in urban areas, just as they are in the rest of the country.

With the prices running so high, some lawmakers are pushing legislation to increase oil taxes, saying the oil companies are making too much profit off Alaska. Two of the biggest, ConocoPhillips and BP, reported $1.8 billion each in profit on Alaska oil production in 2004.

Daren Beaudo, BP's Anchorage spokesman, says the success benefits the state and its residents. Alaska counts on oil revenue to pay for state services - it needs an average daily oil price of about $46 to balance the budget.

The price of oil is unlikely to stay in record territory, however, said Michael Williams, the state Revenue Department's chief economist.

The world is not running short of oil, Williams said. Instead, oil traders are worried about several factors that could hurt production, including political instability, tight refining capacity and the possibility of hurricanes disabling oil platforms in the Gulf of Mexico. Refinery breakdowns and a decline in gasoline inventories reported by the U.S. Department of Energy added to the worries last week.

Source: Associated Press/AP Online

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