LONDON, June 26: Oil prices soared on Thursday after the president of Opec, Algerian Energy Minister Chakib Khelil, said crude could hit a record $170 this year owing to a weak US currency and geopolitical unrest.

Last week, oil hit historic highs just short of $140.

New York’s main oil futures contract, light sweet crude for August delivery, was up $3.79 at $138.34 per barrel at about 1430 GMT, recouping all the ground lost on Wednesday after US stockpile figures.

Brent North Sea crude for August jumped $2.84 to $137.17.

Prices, which tumbled $3.50 on Wednesday, were up by about 50 cents on Thursday before Khelil’s comments, supported by a weak dollar and risks of unrest in producer countries, analysts said.

“I predict probably prices of $150 to $170 this summer,” Khelil said on Thursday in an interview with France 24.

“It (the market) will probably fall a bit towards the end of the year.”

The Opec president added that a weak dollar was the main cause of surging oil prices. A struggling US currency makes goods priced in the dollar cheaper for foreign buyers, thus pushing up demand.

Khelil also cited Western “threats against Iran” over its nuclear projects as a key reason for prices spiking on world markets. Oil prices have doubled in just one year.

“If (the threats) increase, I think the price of oil will rise further this summer as it would coincide with stronger demand for gasoline (petrol), particularly in the United States,” added Khelil.

The Opec chief said that the Organisation of Petroleum Exporting Countries was ready to meet any additional demand for crude in the future.

Opec produces about 40 per cent of the world’s oil.

Oil prices had closed down $3.50 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 that stockpiles of crude 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.

“The report also showed four week average gasoline demand is 2.1 per cent down from a year ago; this goes to show more and more people are reacting to high oil prices,” said Nimit Khamar from the Sucden brokerage in London.—AFP