Oil prices strike record highs above $142
Oil prices jumped to record high levels above 142 dollars a barrel yesterday, as the US currency weakened further and stock markets tumbled at the end of a volatile trading week for investors.
New York light sweet crude struck a historic peak of 142.26 dollars a barrel and Brent North Sea crude reached an all-time high of 142.13 dollars in electronic deals.
"Crude oil futures made fresh record highs, with higher oil prices fuelling inflationary fears and thus hurting stock markets, which in turn triggered a further rally in commodities as investors seek better returns," Sucden analyst Michael Davies said in London.
Prices "continued to be buoyed by the dollar, as the greenback continues its free fall decent this week," he added.
Opec's president on Thursday predicted that oil prices could reach 170 dollars this year owing to a weak dollar and geopolitical unrest.
Crude futures crossed 140 dollars for the first time on Thursday following the price forecast made by Opec's chief, Algerian Energy Minister Chakib Khelil, in an interview with television news channel France 24.
After achieving new peaks on Friday, New York's main oil futures contract, light sweet crude for August, was trading at 141.40 dollars, up 1.76 dollars from Thursday's close.
Brent North Sea crude for August delivery stood at 141.06 dollars a barrel, a rise of 1.23 dollars.
The cost of oil has doubled in a year, with consumers blaming the surge on insufficient output from the Organization of Petroleum Exporting Countries.
However Opec, which produces 40 percent of the world's oil, argues that speculators are responsible for pushing up crude in reaction to a falling dollar and tensions in oil-producing countries, such as Iran, Iraq and Nigeria.
A weak US currency makes oil priced in dollars cheaper for foreign buyers, thus pushing up demand for the commodity.
In a volatile trading week, crude prices had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in stockpiles in the United States, the world's biggest energy consumer.
The US Department of Energy said that stockpiles of crude had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.
Oil prices had rallied at the start of the week after major energy producers ruled out further output despite consumer fears the world faces a tight supply situation.
Saudi Arabia's King Abdullah announced last Sunday that his country had increased output to 9.7 million barrels a day as he opened a summit on the soaring international price of crude in the Saudi city of Jeddah involving producers and consumers.
However the market had already expected the formal announcement after the kingdom's London embassy released a statement last week that outlined a plan to increase output by 200,000 barrels a day.
Prices also shot higher on Monday after militants blew up a pipeline in Nigeria over the weekend, traders said.
Militants had attacked a key Chevron oil supply pipeline in the latest operation targeting Nigeria's oil industry.
The US oil giant was forced to shut down activities after the attack in the volatile Niger Delta, halting output by 120,000 barrels per day.
The Anglo-Dutch oil company Shell has also said it cannot promise to deliver 225,000 barrels per day for June and July following an unprecedented raid on its offshore Bonga oilfield.
Unrest in the Niger Delta has cut total oil production in one of Africa's biggest producers by a quarter over the past two years.