Oil soars past $143 mark

June 30th, 2008 - 10:20 pm ICT by IANS  

London/New York, June 30 (IANS) Oil prices Monday surged past $143 a barrel, an all-time high, as the dollar remained weak amid tension between Iran and Israel. The front-month August Brent contract on London’s ICE futures exchange was up $2.72 at $143.03 a barrel after earlier touching new record high at $143.91 a barrel.

The front-month August contract on the New York Mercantile Exchange was trading $2.39 higher at $142.60 a barrel after earlier hitting a high of $143.67 a barrel.

The market remains well supported by the broad weakness in the dollar, ever-increasing investor interest in commodities, persistent supply disruptions and geopolitical tensions, the Wall Street Journal said Monday quoting an expert.

The European Central Bank’s interest rate decision Thursday, expected to be hawkish, may weaken the dollar further against the euro, which could send crude oil on an upward spiral.

Until central bankers decide to strengthen the dollar by raising US rates and cutting those in Europe, oil prices will continue to have a huge investment price premium that has nothing to do with oil supply and demand, the Journal said, quoting another expert.

Supply worries come from various new developments. News came of a weekend attack on a Nigerian oil facility that kept market participants on their toes.

The new record came as the heads of oil majors met to discuss rocketing prices at the World Petroleum Congress in Madrid.

British Petroleum chief executive Tony Hayward, speaking at the opening session, warned against hopes that the present high prices are a bubble that will burst as they did in the 1970s, saying that supply and demand had since changed.

Analyst said instability in Iran, the world’s fourth largest oil producer, was helping drive up prices.

The commander of Iran’s Revolutionary Guards warned in the weekend that Tehran would respond to an attack against it by attacking Israel with missiles and controlling a key oil passageway in the Gulf.

An emergency summit in Jeddah, Saudi Arabia, earlier this month, failed to ease the current oil price surge, despite the Kingdom pledging to add another 200,000 barrels per day next month to a 300,000 barrel per day production increase already announced in May.

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