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Oil barrel hits $145, breaks new record

Latest update : 2008-07-03

Continuing its record-breaking run, a barrel of crude oil hit a record $145 high, fueling yet more fears over inflation and slower economic growth around the world.

Oil continued its record-breaking run on Friday, hitting 145 dollars a barrel for the first time after a US report added to supply worries and the US dollar weakened, analysts said.
Brent North Sea crude for August delivery traded at 145.00 in early Asian trade, 74 cents higher than its record close of 144.26 in London the previous day, when the contract topped 144 dollars for the first time.
New York's benchmark futures contract, light sweet crude for August delivery, was 81 cents higher at 144.38 from its record close of 143.57 on the New York Mercantile Exchange on Wednesday.
The latest surge followed a warning from Iranian Oil Minister Gholam Hossein Nozari that his country would react fiercely to any attack against it.
"Iran, if there were any kind of activity of any sort, is not going to be quiet and would react fiercely," he told reporters on the sidelines of the World Petroleum Congress in Madrid.
He said oil prices, which have been driven to record levels partly because of fears about the loss of Iran's 4.0 million barrel a day output, would rise radically if Israel or the United States launched a military strike.
Western powers and Iran have been engaged in long-running efforts to resolve a stalemate over Iran's nuclear enrichment programme, which the West fears could be used to make an atomic bomb.
Iran, the world's fourth largest oil producer, says its nuclear programme is for peaceful purposes.
The US Energy Information Administration said Wednesday that stockpiles of crude had fallen by 2.0 million barrels in the week to June 27.
Phil Flynn at Alaron Trading said oil continued to gain momentum amid worries about the global economy, the dollar and other ills.
The dollar slumped to a two-month low against the euro on Wednesday. A weaker dollar makes dollar-denominated commodities like oil cheaper for buyers with stronger currencies.
"Oil is a proxy for everything and an accurate reflection of our deep-seated fears and all of our insecurities," Flynn said.
"It is also a reflection of a commodity that is in tight supply and one that will still have value if the rest of the financial world comes crumbling down around us."
With inventories falling, OPEC secretary general Abdallah el-Badri said in an interview published Wednesday that US authorities should stop pressing the organisation's member nations to pump more crude.
"I want them to stop harassing OPEC countries," he told the Spanish newspaper El Pais, when asked about the US Congress allowing suits against OPEC members for conspiring to restrict supplies or drive up prices.
Global oil prices have doubled in the past year and have risen by 45 percent since the start of 2008, when they breached 100 dollars for the first time, triggering fears over inflation and slower economic growth.
Protests against the soaring prices have also broken out around the world.

Date created : 2008-07-03