Oil surges to new record price 03/07/2008 - 07:55:01
Stock markets were expected to come under more pressure today after oil prices surged to a new record above $145 a barrel.
Brent crude for August delivery traded on the London-based ICE Futures Exchange reached $145.75 before easing back slightly.
The latest spike comes on a combination of concerns over a weak US dollar, surging oil demand and fears about supply disruptions in the Middle East and Africa.
This fed into a 1.5% drop for New York’s Dow Jones Industrial Average yesterday. Brokers in London were forecasting the FTSE 100 Index could open down around 40 points today.
CMC Markets chief dealer Paul Webb said: “It’s certainly going to be a big day for equity markets with last night’s close on Wall Street and bumper oil prices both weighing.”
Global oil prices have doubled over the past year and are up by 45% since the start of 2008.
Light, sweet crude being traded on the New York Mercantile Exchange was also at record highs overnight, peaking at 144.57 a barrel before settling back marginally.
The commodity’s latest surge also comes amid escalating tensions between the US and Iran.
Traders are worried Tehran could try to halt shipments and seize control of the strategically important Strait of Hormuz if attacked by Israel or the US. About 40% of the world’s tanker traffic passes through the Middle Eastern choke-point.
The European Central Bank is also expected to raise interest rates today, weakening the dollar further and so tempting even more investors into oil.
Last week Chakib Khelil, president of the oil producing cartel Opec, forecast that the cost of crude could rise to between $150 and $170 a barrel this summer.
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Stock markets were expected to come under more pressure today after oil prices surged to a new record above $145 a barrel.
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