Oil prices scale record highs above $112 a barrel

World oil prices touched new record highs above $112 a barrel in Asian trade on Tuesday as supply concerns and a sluggish greenback remained key factors behind the hike, dealers said.

They said market sentiment remained bullish after the latest United States government data showed a surprise sharp fall in the country’s energy stockpiles, while the weak dollar also contributed to a surge in crude oil futures.

Also pushing prices higher was a temporary shutdown to repair a small leak in a pipeline that transports oil into the US Midwest, and dealers said that a prolonged shutdown could take the cost of crude even higher.

In late morning trade, New York’s main contract, light sweet crude for May delivery, briefly traded at a new intraday peak of $112,48 before easing to $112,33. The previous record peak was $112,21 set last week.

The contract closed at a record high of $111,76 at the end of floor trading on Monday on the New York Mercantile Exchange during US hours.

London’s Brent North Sea crude for May delivery rose to a new intraday high of $110,45, up 61 cents from its close of $109,84 on Monday. The London contract broke through the $110 barrier for the first time on Monday.

“Oil prices have been firm and it partly reflects the soft tone of the US dollar,” said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

A weak US currency tends to encourage demand for dollar-priced crude because it becomes more affordable for foreign buyers.

The US dollar dived to a fresh low of 1,5913 to the euro last Wednesday and has only partially regained its ground against the European unit.

Fresh supply concerns were also a factor after US energy stockpiles showed an unexpectedly sharp decline in the week ending April 4.—AFP

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