 |
|
Oil price nears $120
|
April 28, 2008, 13:15
Oil hit a new record near $120 a barrel today, boosted by a string of bullish factors that include a UK refinery strike and disruptions to Nigeria's output that highlight the market's anxieties over threats to supply.
Prices held firm below earlier highs, despite a rally in the US dollar versus the euro and yen, which reflected growing expectations that the US Federal Reserve may not cut interest rates this week.
US light crude for June delivery was up 28c at $118.80 a barrel after a lifetime high of $119.93. Prices are up almost 25% since the start of the year. London Brent crude was up 6c to $116.40. Crude prices have surged more than fivefold since 2002 as global supplies struggle to keep pace with rising demand in emerging economies, such as China.
The Organisation of the Petroleum Exporting Countries (Opec), that produces more than a third of the world's oil, has refused to pump more, saying the market is adequately supplied.
Opec blames the fall of the dollar
Opec President Chakib Khelil blamed the fall in the US dollar for high prices and did not rule out prices rising to $200 a barrel. A fall in the US dollar has played a big part in oil's surge, boosting the value of commodities priced in the US currency.
Gold, for example, hit a record high of more than $1 000 an ounce on March 17. But gold is now more than 13% below its peak as investors wait to see the direction of US interest rates. Investors are now focused on the Federal Reserve's interest rate setting meeting, which begins tomorrow.
Meanwhile, financial markets had expected a cut in interest rates to help revive the flagging US economy, but now some investors believe the Fed could signal its rate cutting is over. - Reuters
|
|
