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Oil prices top 142 dollars PDF Print E-mail
Saturday, 28 June 2008

AFP, LONDON - Oil prices struck record highs above 142 dollars on Friday as the US currency weakened and stock markets tumbled at the end of a volatile week for investors worldwide.

New York light sweet crude hit a historic peak of 142.26 dollars a barrel and Brent North Sea crude reached an all-time high of 142.13 dollars.

"Crude oil futures made fresh record highs, with higher oil prices fuelling inflationary fears and thus hurting stock markets, which in turn triggered a further rally in commodities as investors seek better returns," Sucden analyst Michael Davies said in London.

Prices "continued to be buoyed by the dollar as the greenback continues its free fall descent this week," he added.

OPEC's president on Thursday predicted that oil prices could reach 170 dollars this year owing to a weak dollar and geopolitical unrest.

Crude futures crossed 140 dollars for the first time on Thursday following the price forecast made by OPEC's president, Algerian Energy Minister Chakib Khelil, in an interview with television news channel France 24.

After the records set Friday, New York's main oil futures contract, light sweet crude for August, slipped back to 140.85 dollars, still showing a gain of 1.21 dollars from Thursday's close as traders banked their profits.

Brent North Sea crude for August stood at 140.81 dollars, up 98 cents.

The cost of oil has doubled in a year, with consumers blaming the surge on insufficient output from the Organization of Petroleum Exporting Countries.

However OPEC, which produces 40 percent of the world's oil, argues that speculators are responsible for pushing up prices in reaction to a falling dollar and tensions in oil-producing countries, such as Iran, Iraq and Nigeria.

A weak US currency makes oil priced in dollars cheaper for foreign buyers, thus pushing up demand for the commodity.

In a volatile trading week, prices had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in stockpiles in the United States, the world's biggest energy consumer.

The US Department of Energy said crude stockpiles had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.

Oil prices had rallied at the start of the week after major energy producers ruled out significant output increases.

Saudi Arabia did announce an increase of 200,000 barrels per day at a summit between producers and consumers in the Saudi city of Jeddah on Sunday but this had been previously announced and so failed to help the market much.

Prices also shot higher on Monday after militants blew up a pipeline in Nigeria over the weekend, cutting output by 120,000 barrels per day, to add to concerns about exports from the country.

Anglo-Dutch oil company Shell had earlier said it could not promise to deliver 225,000 barrels per day for June and July following an unprecedented raid on its offshore Bonga oilfield.

Unrest in the Niger Delta has cut total oil production in one of Africa's biggest producers by a quarter over the past two years.

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