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LONDON - The price of New York crude oil surged past US$125 per barrel on Friday, lifted by speculative demand amid concerns about tight global energy supplies, analysts said.
New York's main oil futures contract, light sweet crude for June delivery, spiked as high as US$125.98 in early afternoon London trading.
And London's Brent crude contract hit an all-time pinnacle of US$125.68.
"Oil futures hit fresh record highs, continuing gains from yesterday," said Sucden analyst Michael Davies on Friday.
Prices have rocketed to fresh records every day this week on the back of unrest in key producer Nigeria, other ongoing supply worries and the weak dollar which stimulates demand.
The price of oil has soared by 25 percent since the start of 2008 and has doubled since the same stage last year -- when it stood at about US$62.
Oil vaulted above the psychological US$100 mark last January and has since jumped above US$110 and US$120, as the market was also energised by soaring demand from Asian powerhouse economies China and India.
Prices continued to bolt higher on Thursday after the OPEC cartel insisted the market was well-supplied and driven by speculators.
OPEC Secretary General Abdalla Salem El-Badri said Thursday that there was no shortage of crude oil, brushing aside US calls for higher output to dampen runaway prices.
"There is clearly no shortage of oil in the market," El-Badri said in a statement.
The 13-member Organisation of the Petroleum Exporting Countries (OPEC) produces about 40 percent of the world's oil, with current output at about 32 million barrels per day.
El-Badri also maintained OPEC's stance that oil-market volatility has been driven by financial market developments and the increased flow of speculative funds into oil futures.
"The turmoil in some global equity markets and the considerable depreciation in the US dollar have encouraged investors to seek better returns in commodities, particularly in the crude oil futures market. This has driven prices higher," he added.
At Sucden, Michael Davies agreed that speculative trades from powerful and wealthy investment funds was helping fuel bumper price gains for oil.
"Another major factor being cited at the moment is keen interest in the oil market by the (investment) funds, which are currently being attracted by oil's rapid price appreciation this year," Davies said.
"This probably explains the move higher over the last few days." - AFP/ir
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