Oil prices briefly surged to a record high above US$126 on Friday, driven into uncharted territory by speculators trying to take advantage of global supply concerns, analysts said.
Oil prices have rocketed to fresh record highs every day this week in reaction to unrest in key producer Nigeria and other ongoing supply worries.
New York’s main oil futures contract, light sweet crude for June delivery, spiked as high as US$126.25 in intra-day trading before closing at US$125.96, marking a sharp gain of US$2.27 from Thursday’s closing value.
In London, Brent crude oil briefly hit an all-time peak of US$125.90. The contract subsequently settled up a strong US$2.56 at US$125.40.
Sucden analyst Michael Davies said there was “keen interest in the oil market by the [investment] funds, which are currently being attracted by oil’s rapid price appreciation this year.”
“This probably explains the move higher over the last few days,” he said.
World oil prices have rocketed 25 percent since the start of the year and have doubled in the past 12 months from around US$62.
Oil values vaulted above the psychological US$100 mark in January and have since jumped above US$120. Analysts said the price spikes can also be attributed to rising energy demand from Asian powerhouse economies China and India and the weak US dollar.
Unrest and militant attacks targeting oil company infrastructure in Nigeria, Africa’s largest crude producer, have also contributed to the price spikes, analyst say.
Prices continued to bolt higher on Thursday after the OPEC cartel insisted the market was well-supplied and driven by speculators rather than by underlying demand.
OPEC secretary-general Abdalla Salem El-Badri said on Thursday that there was no shortage of crude, brushing aside US calls for higher output to dampen runaway prices.