LONDON, May 8: Oil prices came off near record levels on Thursday after spiking close to $124 as the Opec cartel insisted that the market was well supplied and being driven by speculators, not real demand.

Prices have rocketed by almost a quarter since the start of the 2008 on the back of tightening global supplies and the weak dollar, sparking international concern among consumer nations.

On Thursday, New York’s main oil futures contract, light sweet crude for June delivery, fell $1.39 to $122.14 a barrel. On Wednesday, it had struck a record high $123.93.

London’s Brent crude contract hit a lifetime peak of $122.98 in late afternoon European trade on Thursday before easing to $121.48, down 84 cents on Wednesday’s close.

Opec Secretary General Abdalla Salem El-Badri said on Thursday that there was no shortage of crude oil, brushing aside US calls for higher output to dampen runaway prices.

“In recent months, oil prices have become increasingly volatile, mainly driven by financial market developments and the increased flow of speculative funds into oil futures,” El-Badri said in a statement to the press.

“The turmoil in some global equity markets and the considerable depreciation in the US dollar have encouraged investors to seek better returns in commodities, particularly in the crude oil futures market. This has driven prices higher.

“There is clearly no shortage of oil in the market,” he said.

“Opec will continue to be proactive and monitor these developments closely. The Organisation stands ready to act if the market shows a need for any further measures,” he added.

The 13-member Organisation of Petroleum Exporting Countries produces 40 per cent of the world’s oil, with current output at about 32 million barrels per day. Oil prices have crashed through records every day this week, jumping by about seven dollars in total.

Sucden analyst Michael Davies said on Thursday that for investors, “risks still remain and given recent comments from Goldman Sachs ... anything is possible in the oil market at the moment.”—AFP