Oil price hits another record near $125

World oil prices hit a fresh record high point close to $125 per barrel on Friday, extending this week’s record run after the Organisation of the Petroleum Exporting Countries (Opec) insisted the market was well-supplied and driven by speculators.

New York’s main oil futures contract, light sweet crude for June delivery, spiked to an historic $124,73 per barrel at 6am GMT in European deals.

But it eased later to $124,24, a rise of 55 cents from the closing price in New York on Thursday.

London’s Brent crude contract had hit an all-time pinnacle of $124,25 in earlier Asian trading, but was later at $123,68 for a gain of 84 cents from the close on Thursday.

“The oil market is so overwhelmingly bullish at this point … it is looking at the $125 mark as its next target,” said Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore.

Prices had bolted higher on Thursday after Opec secretary general Abdalla Salem El-Badri said that there was no shortage of crude oil, brushing aside United States calls for higher output to dampen runaway prices.

“There is clearly no shortage of oil in the market,” El-Badri said in a statement.

The 13-member Opec produces about 40% of the world’s oil, with current output at about 32-million barrels per day.

El-Badri also maintained Opec’s stance that oil-market volatility has been driven by financial market developments and the increased flow of speculative funds into oil futures.

“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,” he added. — AFP

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