For the first time, oil prices reached their highest value of $110.20 a barrel in New York.
Rocketing oil prices broke through 110 dollars per barrel for the first time in New York on Wednesday continuing a record run amid supply concerns and fevered market speculation.
The new record occurred as New York's main oil futures contract, light sweet crude for delivery in April, struck 110.20 dollars per barrel.
Traders said the ailing dollar also has fueled a spike in world oil prices because crude is priced in dollars and has become cheaper to buy for purchasers holding stronger currencies.
Supply concerns have persisted since the Organization of the Petroleum Exporting Countries oil producer's cartel announced last week that it was maintaining its output quotas at current levels despite skyrocketing prices.
Crude values also pushed higher despite the US Department of Energy reporting earlier Wednesday that US crude oil stocks had risen 6.2 million barrels last week, far above the gain of 1.7 million that most analysts had predicted.
"Whether you call this run speculative buying or hedging against dollar weakness, it definitely has nothing to do with oil market fundamentals" of supply and demand, Standard Bank analysts said in a research note.
Some economists have expressed concern about spiking oil prices, saying they have unleashed inflationary pressures on the global economy and especially the US economy which is already enduring a housing slump and a credit crunch.
The International Energy Agency, which seeks to coordinate energy policy among the world's leading industrialized nations, said Wednesday that it would convene a meeting of oil industry experts to review the jump in prices.
"There will be a meeting (Monday in Paris) on prices with experts, both from the financial and (oil) trading sectors, as well as with representatives of the production and refining sectors," an IEA spokeswoman told AFP.
Date created : 2008-03-12