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SINGAPORE: World oil prices continued their
record-breaking run on Thursday, reaching a fresh intra-day peak
near $124 dollars a barrel despite a larger-than-expected rise in US
crude stocks.
The record of $123.87 reached by
New York’s main oil futures contract, light sweet crude for June
delivery, slightly exceeded the old intra-day high of $123.80
reached on Wednesday in US trading.
The contract later was a penny
higher at $123.54 in Asian afternoon trade from its record close of
$123.53 in New York.
Brent North Sea crude for June
delivery was 11 cents higher at $122.43 a barrel.
In London on Wednesday the
contract touched an all-time peak of $122.70 dollars, before
settling up $2.01 at $122.32.
Oil prices have crashed through
records every day this week, jumping at least $7.
“Right now the market is
trading by momentum as market participants tend to selectively focus
on bullish news,” said Victor Shum, senior principal at Purvin and
Gertz energy consultancy in Singapore.
“Heady prices point to a
significant risk of a correction,” he added.
Some economists fear that surging
oil prices could crimp US economic growth, and Wall Street tumbled
on Wednesday after the latest spike in oil prices.
The Dow Jones Industrial Average
of blue chips closed down 1.59 percent while the technology-laden
Nasdaq composite finished down 1.80 percent, in turn dragging down
Asian bourses on Thursday, dealers said.
America is the world’s biggest
oil importer but has been threatened by a long-running housing
market slump and a related credit squeeze.
Oil prices continued their gains
despite a weekly survey by the US government showing that the
country’s crude stocks rose by 5.7 million barrels to 325.6
million barrels for the week ending May 2.
But Shum said that while the
inventory report showed an unexpectedly large crude gain, many
market participants zeroed in on draws in distillates, which include
diesel and heating oil, and which provided the momentum for a strong
close.
Traders said a combination of
forces have pushed prices higher, including market speculators and a
decision by the Organization of Petroleum-Exporting Countries (OPEC)
cartel not to hike output quotas.
Prices have also been buoyed by
ongoing violence in Nigeria, Africa’s largest producer, traders
said. Attacks have cut Nigeria’s oil production by about a quarter
over the past two years.
Angst over oil prices has also
been stirred by continuing diplomatic tension over Iran’s nuclear
ambitions, which Tehran says are peaceful. Iran is OPEC’s
second-largest producer.
“Issues with supply in Iran and
Nigeria . . . have already been taken into account in current
pricing,” said Shum.
The US investment firm Goldman
Sachs forecasted on Tuesday that world oil prices could strike $200
dollars within two years.
--AFP
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