Oil prices hit a new record of nearly 126 dollars a barrel yesterday as a weakening US dollar and supply concerns boosted prices.
Light sweet crude for June delivery rose as high as 125.98 in New York, with Brent crude soaring above 124 US dollars a barrel in London.
Oil's record run has seen prices jump by nearly 30 per cent since the start of the year.
The latest increa
se heralds more misery at the petrol pump for hard-hit motorists and threatens efforts to keep inflation under control.
The AA motoring organisation said the average national price of a litre of unleaded had reached 110.8p yesterday – continuing a rise above £5 a gallon. Diesel costs an average 121.4p.
Investors are buying oil as a hedge against a dollar which is weakening as the US economy struggles.
The latest surge in the commodity came after the European Central Bank held its interest rate steady and signalled that cuts were unlikely because of inflation risks – strengthening the euro against the greenback.
Comments from the head of the Opec oil cartel suggesting there was no need to boost production as member countries were struggling to find buyers for extra supplies added to the pressure on prices.
Recent tension in oil-rich regions – such as attacks on Shell pipelines in Nigeria – have also been behind price hikes, while analysts at investment bank Goldman Sachs have predicted that oil could reach 200 US dollars a barrel within two years.
The full article contains 256 words and appears in n/a newspaper.
