Oil tops $145 ahead of US July 4 holiday

Oil has risen nearly 13% since the beginning of June

Oil hit a record above $145 a barrel today ahead of the Independence Day holiday weekend in the US before paring gains as the dollar recovered from a two-month low.

US light sweet crude oil for August delivery was trading at $144.35 a barrel, up 78c after earlier hitting a record $145.85. London Brent was trading $1.03 higher at $145.29 after reaching $146.69 a barrel.

US payroll data released today suggested the job market had not deteriorated as much as many investors had feared, helping the dollar recover from a two-month low against the euro hit earlier in the day.

Comments from the head of the European Central Bank that suggested further interest rate increases in Europe could be put on hold also supported the greenback.

Oil has risen nearly 13% since the start of June on concerns about Middle East tensions, tight supplies and investors buying crude as a hedge against inflation and the falling value of the dollar.

Saudi Arabia willing to pump more oil
Meanwhile, Saudi Oil Minister Ali al-Naimi reiterated his belief today that the current rally in oil prices was being propelled by speculators rather than any shortage of crude oil.

Naimi repeated promises that Saudi Arabia would pump more oil if there was demand for it.

Oil refiners in the US and Asia have said official Saudi prices make it uneconomical to buy more barrels.

Iran has threatened to block oil shipments through the Strait of Hormuz in the event it is attacked. Speculation has mounted in recent weeks that Israel may be preparing a preemptive strike against Tehran's nuclear program.

Approximately 40% of the world's seaborne crude oil trade passes through the Strait of Hormuz. – Reuters