LONDON, Oct 26: World oil prices surged to historic highs on Friday, breaching $92 for the first time in New York on rising tension in crude-rich Iran and tight US energy supplies, analysts said.
“Now that oil is in the 90s, it is much easier to reach $100.
Anything can happen in this market,” Astmax fund manager Tetsu Emori said.
New York’s main futures contract, light sweet crude for delivery in December, soared to a record-high $92.22 per barrel.
It later stood at $91.10, a rise of 64 cents from Thursday’s close.
In London, Brent North Sea crude for December delivery struck an all-time pinnacle of $89.30 per barrel on Friday. It later stood at $88.35, up 87 cents.
Crude futures have rocketed by about $10 in only a month and by $30, or 50 per cent, in a year.
“Supply tightness and developments surrounding Iran remain the focus of attention,” Sucden analyst Michael Davies said on Friday.
The United States on Thursday escalated tensions over Iran’s nuclear drive and alleged backing for terrorism with a raft of new sanctions against the Islamic republic’s military and banks.
Iran denounced the sanctions as illegal and “doomed to failure,” but US Secretary of State Condoleezza Rice said Washington was well within its rights.
Crude futures had leapt by more than $3 on Thursday in reaction to the news, before extending their gains on Friday.
The White House, meanwhile rejected any parallels between its Iran rhetoric and the run-up to the Iraq invasion, adding it had not ruled out the use of force but was “very hopeful” of avoiding war.
Sucden’s Davies, meanwhile added that oil prices were winning support from a weak dollar, which makes commodities priced in the US currency cheaper for buyers using stronger units.
The dollar slumped to a record low against the euro on Friday after poor US economic data heightened expectations of a fresh cut to US interest rates next week, dealers said.
In early European trade, the euro struck $1.4375 -- the highest level since the single currency’s creation in 1999.
Astmax fund manager Emori, meanwhile added that oil prices were also being supported by Opec’s hesitance to increase production and rising tensions elsewhere in the Middle East.—AFP