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LONDON: Oil prices headed toward a record high of
$130 a barrel on Wednesday on anxiety about stretched supplies in
the face of strong demand for energy, analysts said.
New York’s main oil futures
contract, light sweet crude for July delivery, rose 35 cents to
$129.33 a barrel. On Tuesday, it reached an all-time high of
$129.60.
London’s Brent crude contract
for July showed a gain of 46 cents to $128.30 a barrel on Wednesday
after spiking to a record summit of $128.53 earlier in the day.
The market was awaiting the
latest weekly snapshot of energy inventories in the United
States—the world’s biggest consumer of oil—to be published by
the US government on Wednesday.
Tony Nunan, of Mitsubishi
Corp.’s international petroleum business, said concerns over
supplies not keeping up with demand were driving prices higher.
“The market is technically and
fund-driven right now,” he said Wednesday, referring to investors
buying into oil in hopes for higher returns.
David Moore, a commodity
strategist at the Commonwealth Bank of Australia, said a weaker US
dollar and “the recent trend for analysts to revise higher their
oil price forecasts” are helping to push up prices.
Moore added there were reports
that the need for diesel-fuelled power generation in
earthquake-affected areas of China was boosting demand for the fuel.
The Chinese government said
Tuesday the death toll from the earthquake that devastated the
nation’s southwest on May 12 had risen to 40,075.
Despite calls by the United
States for the Organization of Petroleum Exporting Countries (OPEC)
to raise output to cool prices, its president, Chakib Khelil, said
Monday that the oil cartel would take no decision on production
before a meeting in September.
Analysts said a decision by Saudi
Arabia to raise output had not done much to lower crude prices. Many
OPEC officials argue that record oil prices are being driven by
speculators seizing on geopolitical unrest, such as in Nigeria –
Africa’s biggest exporter of crude.
Eric Wittenauer, analyst at
Wachovia Securities, said reports about growing tensions between
Washington and Tehran heightened concerns about a conflict that
could affect oil supplies in Iran and the wider Middle East.
He said the market reacted to an
article in the Jerusalem Post that said US President George W. Bush
“intends to attack Iran before the end of his term.”
“We have certainly not ruled
out the possibility of conflict later this year,” Wittenauer said.
In Washington, the House of
Representatives passed a bill on Tuesday authorizing the federal
government to sue OPEC in US courts over alleged price fixing, in
the latest swipe at the cartel over skyrocketing oil prices.
However, Bush has threatened to
veto the legislation, although its margin of passage in the House
suggested Democrats may get a two-thirds majority needed to sustain
the largely symbolic measure.
Oil prices have jumped more than
a quarter since the start of 2008, when they struck $100 a barrel
for the first time.
In the Philippines
In Manila, a leading opposition
senator urged President Gloria Arroyo to heed the growing clamor for
the suspension of the extend value added tax on oil products.
In a press release, Senator Mar
Roxas 2nd said, “The clamor for immediate relief is getting louder
and louder as the prices of food, oil and other basic needs is
getting higher and higher. It’s clearer that now is the time for
the President to heed this call.”
“The disposable incomes of our
people continue to shrink due to the high cost of food, oil, energy
and their other daily needs. If we don’t heed this cry for
immediate relief, our economy is in danger of slowing down.”
The proposal is gaining adherents
even among Mrs. Arroyo’s followers
“We now have the ways and means
committee chairmen of both House and Senate in favor of immediate
relief for our countrymen,” Roxas added. “I ask my other
colleagues to have an open mind and consider this proposal, for the
sake of our consumers.” 
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