Oil rises above $140 in Asia
Wednesday, 2 July 2008
SINGAPORE, July 1 (AFP): Oil prices rose above 140 dollars in Asian trade today but remained below record highs in a market underpinned by continued Middle East tension and a weak US currency, analysts said.
In afternoon trade, New York's main oil futures contract, light sweet crude for August delivery, was up 54 cents at 140.54 dollars a barrel from its close of 140.00 dollars Monday at the New York Mercantile Exchange.
The New York contract rose to an intra-day record of 143.67 dollars during US trading hours Monday.
Brent North Sea crude for August delivery gained 57 cents to 140.40 dollars. The contract set a trading record of 143.91 dollars before settling at 139.83 dollars Monday in London.
Tension over crude producer Iran and its nuclear ambitions, which Tehran says are peaceful, has once again renewed worries about possible supply disruption from the oil-rich Middle East.
The commander of the US navy's Fifth Fleet warned that the United States will not allow Iran to shut the strategic Strait of Hormuz, the Gulf sea lane through which much of the world's oil is supplied.
The weak US currency, which makes crude and other dollar- priced goods more affordable for purchasers with stronger currencies, was the other factor driving up the oil futures market, analysts said.
"A weaker dollar means more inflation and so everybody is coming back into the commodity market," said Tony Nunan, a manager with Mitsubishi Corp.'s international petroleum business in Tokyo.
Analysts expect the European Central Bank (ECB) to raise interest rates this week, which would push the euro higher against the dollar since euro-denominated investments would provide greater yields.
Global oil prices have doubled in the past year and have continued to soar since they breached 100 dollars for the first time at the start of 2008.
The rising prices have triggered fears over inflation and slower economic growth, and sparked protests around the world.
Consumer countries blame record prices on tight supplies amid strong demand and fears about supply disruption from nations such as Iran, Iraq and Nigeria. They also accuse OPEC of not producing enough crude.
Leading figures in the oil world gathered in Madrid for a conference discussing record-high crude prices, but found themselves divided about the causes.
In afternoon trade, New York's main oil futures contract, light sweet crude for August delivery, was up 54 cents at 140.54 dollars a barrel from its close of 140.00 dollars Monday at the New York Mercantile Exchange.
The New York contract rose to an intra-day record of 143.67 dollars during US trading hours Monday.
Brent North Sea crude for August delivery gained 57 cents to 140.40 dollars. The contract set a trading record of 143.91 dollars before settling at 139.83 dollars Monday in London.
Tension over crude producer Iran and its nuclear ambitions, which Tehran says are peaceful, has once again renewed worries about possible supply disruption from the oil-rich Middle East.
The commander of the US navy's Fifth Fleet warned that the United States will not allow Iran to shut the strategic Strait of Hormuz, the Gulf sea lane through which much of the world's oil is supplied.
The weak US currency, which makes crude and other dollar- priced goods more affordable for purchasers with stronger currencies, was the other factor driving up the oil futures market, analysts said.
"A weaker dollar means more inflation and so everybody is coming back into the commodity market," said Tony Nunan, a manager with Mitsubishi Corp.'s international petroleum business in Tokyo.
Analysts expect the European Central Bank (ECB) to raise interest rates this week, which would push the euro higher against the dollar since euro-denominated investments would provide greater yields.
Global oil prices have doubled in the past year and have continued to soar since they breached 100 dollars for the first time at the start of 2008.
The rising prices have triggered fears over inflation and slower economic growth, and sparked protests around the world.
Consumer countries blame record prices on tight supplies amid strong demand and fears about supply disruption from nations such as Iran, Iraq and Nigeria. They also accuse OPEC of not producing enough crude.
Leading figures in the oil world gathered in Madrid for a conference discussing record-high crude prices, but found themselves divided about the causes.