Oil prices soar to record highs

Oil prices have hit new
two-and-a-half year highs as worries continue about unrest in oil producing nations
in north Africa and the Middle East.

The price of Brent crude edged
above $120 a barrel to $120.08, a two-and-a-half-year high.

US light, sweet crude reached
$108.78 a barrel, a 31-month high.

In addition to the recent unrest,
hopes of stronger growth in the US and supply problems in western Africa have
also helped to push oil prices higher.

“Oil workers in Gabon have
gone on strike again which has hit production,” said Joel Hanley, managing
editor at Platts.

Production by Libya, which is the
world’s 17th largest oil producer, with a 2 per cent market share, has been
almost completely shut down by the conflict there.

“In the short term, oil prices
look very well supported,” said Carsten Fritsch, analyst at Commerzbank in

“The general market sentiment
is positive, but we still feel that prices will come down later this year once
the supply fears have dissipated.”

Iran’s oil minister also added to
the pressure on oil prices by playing down the need for an extraordinary
meeting of the Organisation of Petroleum Exporting Countries (Opec) to discuss
whether to increase supply.

Iran currently holds the rotating
presidency of Opec, which produces about 40 per cent of world crude.

The organisation is not due to
convene to discuss oil production until 2 June 2011, when its 12 member states
will meet in Vienna, Austria.

Kuwait, one of the member
countries, has said it believes the price of oil should be lower.