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SINGAPORE: World oil prices held steady near record highs Friday,
driven by supply worries and a weak dollar, analysts said.
New York’s main oil futures contract, light
sweet crude for August delivery, eased three cents to $145.26 a
barrel from its record close of $145.29 on Thursday at the New York
Mercantile Exchange.
The contract reached an intra-day record of
$145.85 on Thursday.
Brent North Sea crude for August delivery rose
10 cents to $146.18 from its record close of $146.08 on Thursday in
London. The contract hit an intra-day record of $146.69 in earlier
trading Thursday.
Oil has broken a series of price records this
week, continuing the momentum begun at the start of the year when it
pushed through $100 for the first time.
“I think the uptrend is intact and supply-side
concerns will really drive pricing in the coming weeks,” said
Victor Shum, of Purvin and Gertz international energy consultancy in
Singapore.
The surge has triggered fears over inflation and
slower economic growth, while sparking protests around the world.
Divisions between consumer and producer
countries over whom to blame appeared to sharpen at the World
Petroleum Congress, which brought together political and corporate
oil bosses in Madrid.
Saudi Arabia, OPEC’s leading exporter,
expressed concern on Thursday about new records for benchmark crude
and again said it was committed to dialogue between consumers and
producers.
But those discussions show no sign of finding a
solution to market tensions. Both sides cite different reasons:
consumers underline supply shortage fears, while producers blame
financial speculators and a falling US dollar.
Shum said that, along with a weaker greenback,
oil prices have found strength in a flow of investor funds into
commodities from poorly performing global equities markets.
The struggling US currency makes dollar-priced
commodities like oil cheaper for foreign buyers with stronger
currencies.
Shum said a spike to $150 a barrel was possible,
though not immediately, while the chief executive of Russian energy
giant Gazprom forecast that prices would “very soon” hit $250 a
barrel.
Shum said prices will not rise indefinitely
because there will eventually be a negative impact on demand. While
there is evidence of slowing demand in the United States, data from
China and other developing markets will not be clear for several
more months, he said.
“Globally we still have demand growing at a
reasonable pace,” Shum said.
Analysts said one of the reasons for higher oil
prices is that production is failing to catch up with growing global
demand.
They say concerns over supply in Iran, the
world’s fourth biggest crude producer, has been another factor
holding up prices.
Speculation has mounted that Israel might be
planning a military strike against Iran’s nuclear sites.
-- AFP
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