Oil hits record above $121 on supply woes

VIENNA, Austria – Oil futures surpassed $121 a barrel for the first time Tuesday, the spike fueled by worries about threats to supply and a weakening of the U.S. dollar.

The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.


Light, sweet crude for June delivery rose to a record $121.49 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday. The contract later retreated to $121.30 a barrel, up $1.33 from Monday’s close.

Crude futures settled on Monday at $119.97 a barrel, up $3.65 from Friday’s close.

“The bulls are in control of the market,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “The economic report out of the U.S. yesterday on the service sector seems to suggest the economic slowdown may not be as deep as initially thought.”

AP