Oil price hits record high above $112

Published Tuesday, April 15, 2008

By Agencies

World oil prices touched new record highs above $112 a barrel in Asian trade on Tuesday as supply concerns and a sluggish greenback remained key factors behind the hike, dealers said.

They said market sentiment remained bullish after latest US government data showed a surprise sharp fall in the country's energy stockpiles, while the weak dollar also contributed to a surge in crude oil futures.

Also pushing prices higher was a temporary shutdown to repair a small leak in a pipeline that transports oil into the US Midwest, and dealers said that a prolonged shutdown could take the cost of crude even higher.

In late morning trade, New York's main contract, light sweet crude for May delivery, briefly traded at a new intraday peak of 112.48 dollars before easing to 112.33 dollars. The previous record peak was 112.21 dollars set last week.

The contract closed at a record high of 111.76 dollars at the end of floor trading Monday on the New York Mercantile Exchange during US hours.

London's Brent North Sea crude for May delivery rose to a new intraday high of 110.45 dollars, up 61 cents from its close of 109.84 dollars Monday. The London contract broke through the 110-dollar barrier for the first time Monday.

"Oil prices have been firm and it partly reflects the soft tone of the US dollar," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

A weak US currency tends to encourage demand for dollar-priced crude because it becomes more affordable for foreign buyers.

The US dollar dived to a fresh low of 1.5913 to the euro last Wednesday and has only partially regained its ground against the European unit.

Fresh supply concerns were also a factor after US energy stockpiles showed an unexpectedly sharp decline in the week ending April 4.

Crude oil stockpiles slumped by 3.2 million barrels and gasoline inventories shed 3.4 million barrels, according to the US government. (AFP)

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