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| Oil price hits yet another record | |
| (40 minutes later) | |
| The price of oil has continued to climb with US light, sweet crude reaching a record closing price and London Brent rising above $146 a barrel. | |
| Oil prices have risen significantly since the US government announced on Wednesday that its crude stockpiles had fallen by more than expected last week. | Oil prices have risen significantly since the US government announced on Wednesday that its crude stockpiles had fallen by more than expected last week. |
| Brent peaked at $146.69 before falling back $146.08, while US crude added $1.72 to $145.29, having hit $145.85. | |
| Motoring organisation the AA called the rate of increases "eye watering". | Motoring organisation the AA called the rate of increases "eye watering". |
| Absorbing prices | Absorbing prices |
| A barrel of Brent crude has risen by almost $4 since the beginning of the week. | A barrel of Brent crude has risen by almost $4 since the beginning of the week. |
| The AA estimates that a $2-a-barrel rise in crude oil means an extra penny on fuel prices at the pump. This takes a number of weeks to feed through to the fuel stations. | The AA estimates that a $2-a-barrel rise in crude oil means an extra penny on fuel prices at the pump. This takes a number of weeks to feed through to the fuel stations. |
| "The market can absorb a little bit of the increase on the forecourt, but nothing like this," the AA's Paul Watters told the BBC. | "The market can absorb a little bit of the increase on the forecourt, but nothing like this," the AA's Paul Watters told the BBC. |
| Currently, unleaded petrol is 118.95 pence per litre on average and diesel 132.20p, according to Experian. | Currently, unleaded petrol is 118.95 pence per litre on average and diesel 132.20p, according to Experian. |
| An AA survey in April showed that almost two thirds of motorists were either doing fewer trips by car or cutting back on other spending as a result of higher fuel prices. | An AA survey in April showed that almost two thirds of motorists were either doing fewer trips by car or cutting back on other spending as a result of higher fuel prices. |
| "This is only going to happen more. This is very very bad news for the economy," Mr Watters added. | "This is only going to happen more. This is very very bad news for the economy," Mr Watters added. |
| Fuel prices | Fuel prices |
| Oil prices are expected to rise even further. | Oil prices are expected to rise even further. |
| Russian President Dmitry Medvedev, speaking ahead of next week's G8 meeting of leading industrialised nations, predicted that prices would climb to $150 a barrel. | Russian President Dmitry Medvedev, speaking ahead of next week's G8 meeting of leading industrialised nations, predicted that prices would climb to $150 a barrel. |
| "Unfortunately, rising oil prices create problems for the world's economy," he said. | "Unfortunately, rising oil prices create problems for the world's economy," he said. |
| Companies across the world have been suffering under the strain. | Companies across the world have been suffering under the strain. |
| Air New Zealand has become the latest airline to say it cannot continue to absorb the rising cost of jet fuel, which is now more than $170 a barrel. | Air New Zealand has become the latest airline to say it cannot continue to absorb the rising cost of jet fuel, which is now more than $170 a barrel. |
| The carrier announced on Thursday that domestic fares would rise by 3% and international fares by 5%. | The carrier announced on Thursday that domestic fares would rise by 3% and international fares by 5%. |
| That followed a profit warning from Hong-Kong based airline Cathay Pacific on Wednesday. | That followed a profit warning from Hong-Kong based airline Cathay Pacific on Wednesday. |
| Supply concerns | Supply concerns |
| Some observers have blamed speculators for pushing oil prices higher. | Some observers have blamed speculators for pushing oil prices higher. |
| However, Prime Minister Gordon Brown, speaking to a committee of MPs, said he thought an imbalance in supply and demand was the primary reason for the spike in prices. | However, Prime Minister Gordon Brown, speaking to a committee of MPs, said he thought an imbalance in supply and demand was the primary reason for the spike in prices. |
| "You can't put down to speculation the whole of the problem we are dealing with at the moment," Mr Brown said. | "You can't put down to speculation the whole of the problem we are dealing with at the moment," Mr Brown said. |
| The president of oil group Opec has blamed the weakening of the dollar, which makes oil a more attractive investment. | The president of oil group Opec has blamed the weakening of the dollar, which makes oil a more attractive investment. |
| There had been fears that a rise in eurozone interest rates - which went from 4% to 4.25% on Thursday - would weaken the dollar further and could cause oil prices to rise more as investors turned to commodities rather than the US currency. | |
| But European Central Bank bosses held back from signalling further rate hikes, limiting the damage to the dollar. | |