Oil hits record highs near $142
Analysts have cited an inflow of investor funds as a factor behind the dramatic rise in crude oil prices. Oil Inflation | Reasons to love costly oil | All Headlines
By Agencies |
LONDON: Oil prices rose to record high levels close to $142 a barrel on Friday. Analysts have cited an inflow of investor funds as a factor behind the dramatic rise in prices.
"I predict probably prices of USD 150 to 170 this summer. It (the market) will probably fall a bit towards the end of the year," the president of OPEC, Algerian Energy Minister Chakib Khelil said in an interview with the France 24 television channel.
If there were real demand for extra oil, the Organisation of the Petroleum Exporting Countries (OPEC) cartel would do what was needed to satisfy it, he said, affirming that there was enough oil in the world for about the next 50 years.
Oil prices have roughly doubled over the past year, sparking protests among consumers and workers around the world, and leading to fears for global economic growth.
Khelil said the role of speculation in the rise of prices was no longer contested because even US politicians were raising the matter.
"I predict probably prices of USD 150 to 170 this summer. It (the market) will probably fall a bit towards the end of the year," the president of OPEC, Algerian Energy Minister Chakib Khelil said in an interview with the France 24 television channel.
If there were real demand for extra oil, the Organisation of the Petroleum Exporting Countries (OPEC) cartel would do what was needed to satisfy it, he said, affirming that there was enough oil in the world for about the next 50 years.
Oil prices have roughly doubled over the past year, sparking protests among consumers and workers around the world, and leading to fears for global economic growth.
Khelil said the role of speculation in the rise of prices was no longer contested because even US politicians were raising the matter.
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In Washington Thursday, the House of Representatives voted to order the United States energy market regulator, the Commodity Futures Trading Commission, to immediately curb excessive energy market speculation.
The bill is not yet law and must also be considered by the Senate, next month at the earliest. It could also face a presidential veto.
But David Johnson, an oil analyst with Macquarie Securities in Hong Kong, said the House vote accounted for Friday's pullback in prices.
"You have to argue that that might just dampen some of the enthusiasm," Johnson said.
Khelil said he did not expect prices to hit 200 dollars a barrel, barring a major market crisis such as a halt in production in Iran.
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In that case, he added, prices could possibly surge to "200, 300, 400 dollars."
In the short term, he said, "everything depends on the European Central Bank (ECB) and a decision it could take to raise eurozone interest rates."
"At that time, I think the price of oil will increase." ECB policymakers are to meet next Thursday, when many analysts predict they will decide to raise their benchmark rate by a quarter of a point to 4.25 percent in the face of rising inflationary pressure.
A strong euro, and a weaker US dollar, would drive up demand for oil, which is marketed in the US unit and becomes cheaper for holders of non-dollar currencies.
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Khelil said the price of oil had risen, firstly because of the fall of the dollar, and secondly because of what he termed geopolitical problems in Iran, Iraq or Nigeria.
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