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Oil price hits record above $129

Oil price hits record above $129
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First Published: Wed, May 21 2008. 08 48 AM IST
Updated: Wed, May 21 2008. 08 48 AM IST
AFP
New York: Oil soared to a record above $129 a barrel as worries about US tensions with Iran heightened speculative fever in a market driven by concerns about tight global supplies and strong demand.
New York’s main oil futures contract, light sweet crude for June delivery, traded as high as $129.60 before pulling back slightly to close at $129.02 a barrel, up $2.02 on Monday’s close.
London’s Brent crude contract for July leapt $2.78 to settle at $127.84 a barrel after briefly hitting a new all-time high of $128.07.
Eric Wittenauer, analyst at Wachovia Securities, said reports about growing tensions between Washington and Tehran heightened concerns about a conflict that could affect the oil-rich Middle East.
He said the market reacted to an article in the Jerusalem Post that said U.S President George W Bush “intends to attack Iran before the end of his term. We have certainly not ruled out the possibility of conflict later this year.”
The market also responded to oil supply disruptions in France and OPEC’s unwillingness to hike output, analysts said.
“Overall, oil market participants are currently choosing to focus on the supply side, with investors doubting that robust demand for distillate fuels from Asian, Middle Eastern and other emerging market economies would be met with enough supply,” said Sucden analyst Andrey Kryuchenkov.
French fishermen demanding state aid to cope with soaring fuel costs blockaded France’s largest Mediterranean oil depot at Fos-sur-Mer on Tuesday, escalating a 10-day protest movement.
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First Published: Wed, May 21 2008. 08 48 AM IST