Oil zooms nearly 9 percent higher to record $139

NEW YORK (Reuters) – Oil jumped nearly 9 percent to a record $139 a barrel on Friday, extending a two-day rally to more than $16 as the slumping U.S. dollar and mounting tensions between Israel and Iran attracted a stampede of buyers.

Oil prices could top $150 by July 4, one of the busiest U.S. travel holidays, as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said.


“We are calling for a short-term spike in oil prices,” the bank said in a research note.

U.S. crude settled up $10.75 at $138.54 a barrel before touching an all-time high of $139.12 in its biggest gain in dollar terms on record, adding to a rise of $5.49 on Thursday. London Brent crude settled $10.15 higher at $137.69, off the record $138.12 hit earlier.

“It’s eye-popping. It’s absolutely stunning,” said Chris Feltin, analyst at Tristone CapitaL Inc in Calgary.

Oil has risen 44 percent this year, threatening economic growth in major consumer countries including the United States, whose economy already is hobbled by a housing crisis.

Reuters