Oil nears $142 in Asian trade


Posted at Jun 30 2008 12:52 PM | Updated as of Jun 30 2008 08:52 PM

Agence France Presse

SINGAPORE - World oil prices closed in on 142 dollars in Asian trades Monday, pushed up by continued worries over supply and the weak US currency, dealers said.

In mid-day trade, New York's main oil futures contract, light sweet crude for August delivery, rose 1.57 dollars to 141.78 dollars a barrel after closing Friday at a record 140.21 dollars.

The contract touched a peak of 142.99 dollars in intra-day trade in New York on Friday.

Brent North Sea crude for August delivery gained 1.55 dollars a barrel to 141.86 dollars. The contract had closed Friday in London at a record 140.31 dollars after reaching an intra-day record of 142.97 dollars.

"The bullish trend remains intact once the key 140-dollar resistance level has been broken," said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.

Supply concerns stemming from unrest in major producer Nigeria and geopolitical tensions in the Middle East, as well as the weak US dollar, were the main drivers behind the bullish trend, he said.

"This is really unprecedented... we are at record prices and this rally in pricing has been sustained over a number of years," said Shum.

A weak US currency makes goods priced in the dollar, like oil, more affordable for purchasers armed with stronger currencies, analysts say.

The jump in oil prices, which have doubled in the past year, has sparked protests around the world over fuel costs and fears for economic growth.

The president of the Organization of the Petroleum Exporting Countries (OPEC) predicted last week that oil prices could jump even further this year because of the weak dollar and geopolitical unrest.

"I predict probably prices of 150 to 170 dollars this summer," OPEC president Chakib Khelil, also Algeria's energy minister, said Thursday in an interview with France 24 television.

Record-breaking prices provide the backdrop for the World Petroleum Congress of key industry players, which began in Madrid on Sunday night.

Dominating the agenda during the four-day congress, held every three years, will be the safeguarding of world oil supplies, balancing supply and demand, the fragile state of reserves and the sudden jump in refined product prices.

The president of OPEC, the head of the International Energy Agency and ministers from Nigeria, Russia, Venezuela, India, France and the Netherlands are expected to be present.

They are to be joined by the bosses of major international oil groups ExxonMobil of the United States, CNOOC of China, Britain's BP and British-Dutch group Shell, Rosneft of Russia and Total of France.