Oil price surges past $125

The price of New York crude oil surged past $125 per barrel on Friday, lifted by speculative demand amid concerns about tight global energy supplies, analysts said.

New York’s main oil futures contract, light sweet crude for June delivery, spiked as high as $125,98 in early afternoon London trading.

And London’s Brent crude contract hit an all-time pinnacle of $125,68.

“Oil futures hit fresh record highs, continuing gains from yesterday,” said Sucden analyst Michael Davies on Friday.

Prices have rocketed to fresh records every day this week on the back of unrest in key producer Nigeria, other ongoing supply worries and the weak dollar, which stimulates demand.

The price of oil has soared by 25% since the start of 2008 and has doubled since the same stage last year — when it stood at about $62.

Oil vaulted above the psychological $100 mark last January and has since jumped above $110 and $120, as the market was also energised by soaring demand from Asian powerhouse economies China and India.

Prices continued to bolt higher on Thursday after the Organisation of the Petroleum Exporting Countries (Opec) insisted the market was well-supplied and was driven by speculators.

Opec secretary general Abdalla Salem El-Badri said on Thursday 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. — AFP

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