Oil prices hit a new record of more than US$135 a barrel before falling back in Asia yesterday, with supply worries, rising global demand and a slumping dollar keeping crude futures on an upward track.
With gas and oil prices setting new records nearly every day, many analysts are beginning to wonder what might stop prices from rising.
There are technical signals in the futures market, including price differences between near-term and long-term contracts, that crude may soon fall.
But with demand for oil growing in the developing world and little end in sight to supply problems in producing countries, few analysts are willing to call an end to crude’s rally.
“The sentiment in the market is very bullish at the moment,” said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney.
Mid-afternoon yesterday in Singapore, light, sweet crude for July delivery was up US$1.07 at US$134.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract had earlier hit a trading record of US$135.04 a barrel.