Oil prices set to pass $50 barrier next week

Oil prices look set to break through the $50 barrier next week after soaring to new record highs today.

Fresh attacks in Iraq added to the jitters of traders and sent the price of a barrel of oil to a peak of $49.40 before easing back slightly.

Fears of supply disruptions and their potential impact on the global recovery have hit world stock markets.

Today’s rise was sparked by Shiite militants breaking into the headquarters of Iraq’s South Oil Co in Basra and setting the company’s warehouses and offices ablaze. 80% of oil exports from Iraq leave via Basra.

The violence came just hours after Iraqi oil minister Thamer al-Ghadhban said the country was prepared to resume pumping its capacity of 1.7 million barrels per day. This is up from current levels of about 1 million a day.

Potential disruptions to the flow of oil from the Middle East come at a time of strong demand in China and the United States and supply concerns in Russia and Venezuela.