[Peakoil] Oil price flirts with new high

[Alex Pollard]

On behalf of Jenny:

www.theage.com.au
Oil price flirts with new high
 
May 20, 2008 - 6:48AM

The price of crude oil came close to reaching a new record high on Monday 
as the market shrugged off higher output from Saudi Arabia, traders say.

New York crude hit as high as $US127.77 a barrel, just off its all-time 
peak of $US127.82, reached on Friday.

New York's main oil futures contract, light sweet crude for June delivery, 
later stood at $US127.28 a barrel, up 99 cents.

London's Brent crude contract for June rose 58 cents to $US125.57 a barrel 
on Monday after spiking to a record $US126.34 on Friday.

"We continue to see record highs posted on a daily basis as the bull run 
continues," MF Global senior energy broker Rob Laughlin said on Monday. "It 
feels as though we're likely to see more of the same."

Amid rocketing prices, Saudi Arabia has boosted oil output by 300,000 
barrels per day (bpd) to meet demand and compensate for lower output from 
other producers, Saudi Oil Minister Ali al-Nuaimi said on Friday.

However US president George W Bush said the hike would not solve American 
energy problems.

Soaring prices of crude oil and petrol are adding inflationary pressures to 
an already weakening US economy.

Saudi Arabia, the world's biggest producer of crude, said by June it would 
be producing 9.45 million bpd.

Nuaimi reiterated OPEC's longstanding view that global oil supply was 
balanced with demand.

Saudi Arabia is the kingpin within the 13-nation Organisation of Petroleum 
Exporting Countries, which pumps 40 per cent of the world's oil.

Last week, OPEC trimmed its 2008 estimate of world oil demand growth, 
citing higher prices and slower economic momentum in major industrialised 
countries including the United States.

Oil prices have risen by more than a quarter since the start of 2008, when 
they surged past $US100 for the first time.

In its latest monthly report published on Monday, the independent Centre 
for Global Energy Studies said oil prices would continue to rise unless 
there was a worldwide recession.

"When they start to fall, the drop is likely to be steep," it warned.

Crude futures are being supported by supply disruptions in oil-producing 
nations, notably Nigeria, high demand for energy by China ahead of the 
Summer Olympics in August and a weak US currency which makes dollar-priced 
oil cheaper for foreign buyers.

Goldman Sachs, the most active investment bank in energy markets, last week 
predicted that oil prices would jump to $US141 during the second half of 
2008.

© 2008 AFP