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Oil prices reach new record high London oil price hits $146 record
(about 3 hours later)
The price of oil has continued to climb - with Brent crude rising above $145 a barrel for the first time. The price of oil has continued to climb - with Brent crude rising above $146 a barrel for the first time.
London Brent crude rose by $1.50 to $145.75 a barrel in after-hours electronic trading. US light, sweet crude rose by more than $1 to $144.57. Brent crude rose by $1.83 to $146.09 a barrel in London. US light, sweet crude rose by more than $1 to $144.81.
The rises follow earlier highs recorded in London and New York after the US government announced its oil stockpiles fell 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.
Global oil prices have doubled in the past year. The president of oil group Opec has warned that prices could rise further today if eurozone interest rates go up.
A combination of the weak US dollar, higher demand and concerns about supply disruptions in the Middle East and Africa have forced prices up. Opec president Dr Chakib Khelil told the BBC on Wednesday that a rise in eurozone rates would weaken the dollar further, and would cause oil prices to rise.
"The current market is being driven by the weaker dollar and with the equity markets a disaster, investment money is looking for a more profitable market," said Tetsu Emori, a Tokyo-based fund manager.
The dollar traded at its lowest level against the euro for more than two months, falling to $1.5891 per euro.
A weaker dollar makes oil a more attractive investment.A weaker dollar makes oil a more attractive investment.
Overnight, the dollar traded at its lowest level against the euro for more than two months, falling to $1.5891 per euro.
TensionsTensions
Oil prices are expected to rise further if the European Central Bank raises interest rates later on Thursday. Analysts said that a combination of the weak US dollar, a drop in equity markets, higher demand, and concerns about supply disruptions in the Middle East and Africa have forced prices up.
The president of the Opec oil producers' cartel, Dr Chakib Khelil, told the BBC on Wednesday that a rise in eurozone rates would weaken the dollar further, and would cause oil prices to rise. "The current market is being driven by the weaker dollar and with the equity markets a disaster, investment money is looking for a more profitable market," said Tetsu Emori, a Tokyo-based fund manager.
The latest increase in the price of crude oil also comes amid escalating tensions between the US and Iran. Tensions have also been escalating between the US and Iran.
Iran would respond "fiercely" to any attack against it, Iranian oil minister Gholam Hossein Nozari said on the sidelines of the World Petroleum Congress in Madrid.Iran would respond "fiercely" to any attack against it, Iranian oil minister Gholam Hossein Nozari said on the sidelines of the World Petroleum Congress in Madrid.
However, the minister said that Tehran would not cut oil deliveries and would continue supplying the market even if struck by Israel or the United States. However, the minister said that Tehran would not cut oil deliveries and would continue supplying the market even if struck by Israel or the US.
Top officials have been discussing measures to combat high prices and to increase long-term supplies at the meeting in the Spanish capital.
Fuel pricesFuel prices
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 of higher oil prices.Companies across the world have been suffering under the strain of higher oil prices.
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.