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| Oil price hits record high of $132.08 |
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Thursday, May 22, 2008
LONDON: The price of oil rocketed to a record high 132.08 dollars a barrel on Wednesday as official data revealed unexpected declines in US energy inventories amid increasing Chinese demand, analysts said.
New York light sweet crude struck the all-time pinnacle just a few hours after breaking through 130 dollars for the first time.
In London on Wednesday, Brent North Sea crude reached a record high of 131.57 dollars a barrel.
Crude futures have soared by almost a third in value since the start of 2008, when they breached 100 dollars for the first time.
Oil prices are also surging because of a weak dollar, which makes commodity prices in the US currency cheaper for foreign buyers.
Speculators are additionally diving into the crude oil market owing to geopolitical unrest in oil-producing nations, notably Nigeria and Iran, and in response to OPEC’s unwillingness to increase production, analysts added.
After spiking to a fresh height on Wednesday, New York’s main oil futures contract, light sweet crude for July delivery, stood at 131.56 dollars a barrel, up 2.58 dollars on Tuesday’s close.
Brent North Sea crude for July was up 3.27 dollars at 131.11 dollars.
Analysts had expected slight rises for US crude and gasoline inventories. Tony Nunan, of Mitsubishi Corporation’s international petroleum business, said concerns that supplies might not keep up with demand were driving prices higher.
Venezuela’s oil minister has meanwhile blamed market speculators for the spiralling international price of crude and rejected increased production as a way to calm the market.
“Prices have risen spectacularly because of speculation, because of the devaluation of the dollar and world inflation,” the minister, Rafael Ramirez, said late on Tuesday after a meeting with OPEC secretary general Abdullah el-Badri.
Analysts said a decision by Saudi Arabia; the world’s biggest oil producer, to raise output had not done much to lower crude prices.
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ISSN 1563-9479 
