Oil prices edged high in New York trading Friday, as traders focused on the possibility of lower exports from Russia. The benchmark U.S. crude rose 25 cents, or 0.6%, to $41,61 a barrel, less than a dollar shy of its record close of $42.33 set in June. Gasoline prices gained half a cent to $11.262 a barrel. Russia's biggest oil company Yukos is embroiled in an escalating tax dispute with Moscow, which some fear could ultimately bankrupt the company. In the most recent development, the government is threatening to seize one of Yukos' most profitable subsidiaries and then sell it to pay off a multibillion dollar tax bill. Russia is the world's second largest oil exporter and largest independent producer. Traders have remained concerned about the outlook for short-term supplies, despite recent moves to steady the market. The Organization of Petroleum Exporting Countries last week said it had decided on a increase its production ceiling by half a million barrels a day in August and also cancelled a July 21 meeting on the issue. . The measure was part of a broader agreement reached at OPEC's June 3 meeting, when it decided to increase official production by two million barrels a day in July. Prices touched a record high of more than $42 a barrel right before that meeting. The August increase will put OPEC's official production ceiling at 26 million barrels a day, although its members routinely produce more than their individual quotas. A recent International Energy Agency report said the cartel produced more than 28 million barrels a day in July, when its ceiling was just 23.5 million barrels a day. At one point recently, oil prices had fallen 15% from their record high, closing below $36 a barrel in June.
Since then prices have bounced back on worries about production levels in such major oil producing countries as Iraq, Norway, Nigeria and Russia, as well as terror attacks on the U.S. ahead of the presidential election. During May, traders relentlessly bid up prices on short-term supply concerns triggered by strong global demand and terror attacks on oil industry personnel and facilities in the Persian Gulf region ahead of the peak summer driving season in the U.S. and Europe.