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Oil soars to new record over $135 Oil soars to new record over $135
(40 minutes later)
Oil prices hit a record high above $135 a barrel on Thursday, having rocketed by more than $4 a barrel on Wednesday.Oil prices hit a record high above $135 a barrel on Thursday, having rocketed by more than $4 a barrel on Wednesday.
US light, sweet crude for July delivery reached $135.09, taking its gain for the year so far above 40%.US light, sweet crude for July delivery reached $135.09, taking its gain for the year so far above 40%.
The main driver was the US crude stocks figure, which showed an unexpected fall of 5.4 million barrels.The main driver was the US crude stocks figure, which showed an unexpected fall of 5.4 million barrels.
UK Prime Minister Gordon Brown is working with international partners to persuade the Opec oil producers' cartel to increase supply.UK Prime Minister Gordon Brown is working with international partners to persuade the Opec oil producers' cartel to increase supply.
All this excess profit that has been generated by the oil industry really needs to be invested in refineries, pipelines and oil wells Francisco Blanch, Merrill Lynch
His spokeswoman said that Mr Brown recognised the increases were having an effect on UK consumers and he would be raising this at the forthcoming EU and G8 summits.His spokeswoman said that Mr Brown recognised the increases were having an effect on UK consumers and he would be raising this at the forthcoming EU and G8 summits.
So far, Opec has blamed price rises on speculators and said that there is no shortage of oil. Investment needed
Rises set to continue But one analyst said Mr Brown's efforts were likely to prove in vain and political pressure should, instead, be exerted on leading producers to invest more in long-term capacity.
In addition to the falling US stocks, the continuing weakness of the US dollar was another factor cited as supporting prices. "All this excess profit that has been generated by the oil industry really needs to be invested in refineries, pipelines and oil wells," Francisco Blanch, head of global commodities research at Merrill Lynch, told the BBC.
"This is what the market is asking for at the moment and we just need to ensure... we have the political goodwill also supporting this investment."
Opec has so far blamed price rises on speculators and says there is no shortage of oil.
All but three of Opec's members are already at their maximum daily limits for oil output and pressure has grown on Saudi Arabia, Kuwait and the UAE which do have spare capacity.
Further rises
Some analysts have raised the possibility of prices rising as high as $200 a barrel during the next 18 months.
In addition to falling US stockpiles, the continuing weakness of the US dollar has been another factor cited as supporting prices.
The US Energy Information Administration blamed the fall in its stocks figure on a fall in imports and a pick-up in demand from refineries.The US Energy Information Administration blamed the fall in its stocks figure on a fall in imports and a pick-up in demand from refineries.
Opec members are under pressure to increase output
Oil prices have set new records in 10 of the last 14 trading sessions.Oil prices have set new records in 10 of the last 14 trading sessions.
"You really cannot forecast how much further the market will rally now," said Tatsuo Kageyama from Kanetsu Asset Management in Tokyo."You really cannot forecast how much further the market will rally now," said Tatsuo Kageyama from Kanetsu Asset Management in Tokyo.
"All I can say is the market will continue to rise.""All I can say is the market will continue to rise."
London's Brent crude also set an intra-day high on Thursday, peaking at $135.14 a barrel.London's Brent crude also set an intra-day high on Thursday, peaking at $135.14 a barrel.
Investors moving money into oil from other areas have also been blamed for rising prices.Investors moving money into oil from other areas have also been blamed for rising prices.
"Oil has performed better than equities and bonds," said Victor Shum from the energy consultancy Purvin and Gertz in Singapore."Oil has performed better than equities and bonds," said Victor Shum from the energy consultancy Purvin and Gertz in Singapore.
"There is money looking for better returns and oil has offered better returns and continues to offer better returns.""There is money looking for better returns and oil has offered better returns and continues to offer better returns."