Oil price flies to record high beyond 146 dollars
Oil price flies to record high beyond 146 dollars
Agence France-Presse LONDON - The price of oil set a record high above 146 dollars a barrel here on Thursday owing to falling reserves of US crude, simmering tensions over Iran and a weak dollar, traders said. Russian energy giant Gazprom meanwhile forecast that oil would "very soon" hit 250 dollars a barrel. Brent North Sea oil for August delivery surged to a life-time peak of 146.69 dollars a barrel after breaching 146 dollars for the first time earlier on Thursday. New York’s main oil contract, light sweet crude for August delivery, leapt to an all-time pinnacle of 145.85 dollars on Thursday. "Prices rose to set new all-time highs … supported by a decline in US crude oil inventories," said Barclays Capital analyst Kevin Norrish. After hitting new heights, Brent crude stood at 145.13 dollars a barrel in electronic deals, up 87 cents from Wednesday’s close as traders banked profits. New York crude was 28 cents higher at 143.85 dollars. Oil prices, which have doubled in value over the past year, were driven by news that American crude stockpiles fell by 2.0 million barrels to stand at 299.8 million barrels in the week to June 27. The US government’s Energy Information Administration had also revealed on Wednesday that crude inventories were 15.3 percent lower than at the same stage one year ago. "It was the first time inventory fell below the psychologically critical 300-million-barrel threshold since January," said PetroMatrix analyst Olivier Jakob. The latest record-breaking price surge also came after Iranian Oil Minister Gholam Hossein Nozari said that Iran would react fiercely to any military attack against the oil exporter. The OPEC oil exporting group added on Thursday that it would be difficult to replace the crude output of Iran should the country face attack. "If something happened in Iran, it is difficult to replace (Iran’s output of) 4.1 or 4.2 million barrels a day," OPEC secretary general Abdallah el-Badri told the daily newsletter of the World Petroleum Congress in Madrid. There has been a surge in speculation recently that Israel might be planning a military strike against Iran’s nuclear sites. Iran has been locked in a five-year standoff with the West over its nuclear program. Iran claims it is for generating electricity while Western powers fear the development of nuclear weapons. The oil market also found key support from the struggling US currency, which makes dollar-priced commodities cheaper for foreign buyers and tends to encourage demand, analysts said. "We expect that the price of oil will reach 250 dollars per barrel very soon," Gazprom chief executive, Alexei Miller, told journalists Thursday on a visit to energy-rich Azerbaijan. Miller also said he expected Russia’s oil production to level off in the next few years. Analysts say one of the reasons for higher oil prices is that production is failing to catch up with growing global demand. Russia is the world’s second-biggest producer and exporter of oil after Saudi Arabia.
