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May 17, 2008
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Saturday
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Jamadi-ul-Awwal 11, 1429
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Oil races further higher
LONDON, May 16: The price of oil rocketed to a record high of $127.82 per barrel on Friday, as US President George W. Bush prepared to urge Saudi Arabia to pump more crude, analysts said.
Friday’s record run for New York’s light sweet crude beat the previous all-time peak of $126.98, which was set on Tuesday on worries about tight supplies despite an official downgrade to global oil demand growth.
After peaking at $127.98, New York’s main oil futures contract, light sweet crude for June delivery, stood at $127.43, up $3.31 from Thursday’s close. London’s Brent crude contract for June spiked to its own historic peak of $126.34 on Friday, beating the record of $125.90 reached on May 9. It later on Friday stood at $126.07, up $3.44.
Oil prices have risen by more than a quarter since the start of 2008, when they surged past $100 a barrel for the first time.
US President George W. Bush arrived in Saudi Arabia on Friday for talks with the world’s biggest crude exporter on record oil prices that have hit Western consumers hard. Bush aides have said that, at more than $125 a barrel, oil prices were set to top the agenda of his talks with Abdullah and other Saudi officials.
“The global oil market remains indeed structurally tight,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
“Even though demand growth is showing some weakness, supply growth is also not there. Opec continues to restrain supply and production in non-Opec states are not expected to be strong.”
On Thursday, Opec trimmed its 2008 estimate of world oil demand growth, citing higher prices and slower economic momentum in major industrialized countries including the United States.
Global oil demand was projected to grow by 1.35 per cent in 2008, compared with a previous estimate of 1.4 per cent, Opec said in a monthly survey.
The oil market was also supported by strong demand from China and a weak US currency. Crude futures were also “gaining support from persistent supply concern,” said Sucden analyst Andrey Kryuchenkov on Friday.—AFP
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