Oil set to hit new peaks this year

LONDON (Reuters) – A blistering four-year rally in crude oil shows no sign yet of running out of steam and crude could top $80 a barrel this year, boosting fuel costs for consumers and businesses, analysts said on Tuesday.

London’s Brent crude hit an all-time high of $72.20 a barrel on Tuesday and U.S. crude oil hit a record $70.88, on concern that Iran’s nuclear standoff with the West could cut oil exports from the world’s fourth largest exporter.

“Under the wrong circumstances, you could easily see $80 being broken or even higher than that,” said Kevin Norrish, an analyst at Barclays Capital. “Any major loss of production is going to give us another major push up.”

Oil has almost doubled in two years as increasing demand stretches producers and refiners, and worries mount about threats to supply. A wave of fund buying has helped power this year’s rally as investors seek to beat returns available in equities or bonds.

Reuters