Oil prices stay near record highs

Oil prices remained near to record highs today after closing above US$100 a barrel for the first time in New York last night.

Speculation that Opec will reduce output caused the main contract for light, sweet crude oil to finish at an all-time high of US$100.1, having peaked at US$100.1 earlier in the session.

The 4.5% surge in oil prices yesterday rattled Asian financial markets, with Tokyo’s benchmark stock index falling more than 3%. London’s FTSE 100 Index opened more than 1% lower today.

Analysts said Opec oil-producing nations might cut production in response to the slowdown of the US economy.

Other factors lifting oil above the US$100 a barrel mark were concerns about a falling dollar, the threat of new violence in Nigeria and continuing tensions between the US and Venezuela.

David Moore, Commonwealth Bank commodity strategist, said: “The oil price continues to be supported by concerns over oil supply. There is speculation that Opec will either leave oil production levels unchanged, or, possibly, even reduce production following the 5 March Opec meeting.”