Brent crude hits new record high

The price of the UK’s Brent crude oil hit a new record high of $53 a barrel during trading on Thursday.

Analysts said the $1.78 afternoon surge was caused by a number of factors including strong speculative buying and comments by oil producers cartel Opec
Oil purchasers were said to be buying large quantities because they believe prices will rise still further over the coming weeks.

Brent later fell back to $52.65 before Thursday’s trading close.

Diverse pressures

In New York, the price of US light crude oil also rose strongly, breaking through the $55 level.

Analysts said the increases on both sides of the Atlantic were further fuelled by both a report showing a decline in US natural gas stocks and continuing cold weather.

The comments of Opec acting secretary general Adnan Shehab-Eldin may also have contributed to the speculative buying after he said oil could surge as high as $80 a barrel within the next two years, although he did quantify that this was only “a weak possibility”.

“Largely it’s fund buying, to a lesser extent the natural gas statistics that came out and possibly the remarks by one of the OPEC staff that he thought prices could spike as high as 80 dollars,” said Bache Financial trader Christopher Bellew.

Global oil prices have now nearly trebled from about $20 a barrel in New York at the start of 2002.

Yet adjusted for inflation they remain far below levels reached in 1979 following the Iranian revolution.

http://news.bbc.co.uk/1/hi/business/4316527.stm