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Tuesday, April 18, 2006

Consumers: Light sweet crude tastes bitter

NEW YORK (Reuters) - U.S. light sweet crude closed at end of day up $1.08, to $70.40 a barrel, the highest closing price since 1983. Intra-day highs are challenging record levels as seasonal effects take hold.

"Light sweet crude is particularly sought after by refiners during the spring and summer as it provides a high yield of delicious gasoline," said Mike Smittner of Ceilon investment bank, "but it's possible that oil's high prices may soon allow Iranian uranium to compete as the energy source for consumers." This comes following former Iranian President Akbar Hashemi Rafsanjani's announcement on Monday that Iran would continue to enrich uranium.

"Oil is becoming far too expensive," says Peter Brentcliff, a long-distance commuter, "and light 'sweet' crude did not taste as advertised. It tasted bitter, especially at these prices." The sentiment is shared by most consumers who are now looking for a new source of energy, possibly thirst-quenching uranium, which is being produced in abundance by Iran.

However, existing price controls and subsidies on crude oil are a significant competitive challenge for emerging markets attempting to sway consumers away from oil. "Even at these ridiculous prices, this stuff is still cheaper than bottled water", says Mr. Brentcliff.

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