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The price of oil rose to an all-time high of $130.47 today as demand for fuel grows and the dollar weakened to a one month-low against the euro.
US crude rose by $1.49 on yesterday's close before falling back to $130.36 in early trading today, while London Brent gained $1.69 to $129.53.
Oil has surged by 14 per cent in just three days on a combination on factors including the weakening dollar which slumped to $1.5767 against the euro while a number of commentators increased their forecasts on oil prices since last week.
Robert Laughlin, an analyst at MF Global, told Reuters: “This market refuses to lie down. There is fresh length coming into the market even at these lofty levels.”
Yesterday, T. Boone Pickens, the billionaire oil investor, said he expected oil to hit $150 a barrel this year, after Goldman Sachs last week predicted that prices would reach $141 during the second half of the year. Credit Suisse and Societe Generale also both increased their forecasts.
Demand for fuel is expected to grow as crisis-hit China seeks extra diesel supplies while Opec, the 13 country cartel that produces 40 per cent of the world's oil, confirmed this week that it will not increase supplies before a key meeting in September, despite Saudi Arabia's pledge to President George W. Bush last week to raise production by 300,000 barrels a day.
Chakib Khelil, president of Opec, said: "…indications show that there is no shortage." Qatar oil minister Abdullah al-Attiyah also said there was no need to boost oil supplies to global markets, stating: “The market doesn’t need more oil." While the Iraqi oil minister Hussain al-Shahristani said: “There is more oil in the market than consumers want.”
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Anything that doesn't suit Gordon Brown will be removed from the RPI to minimise State Pension and Benefit increases. Look out for a reshuffle in this direction . You can also expect some more unsavoury announcements as this Government is so unpopular this is an excellent time for more tax increases
V Cooper, Yeovil, UK
After the 2001 bubble burst, investors wanted a more stable asset class, they found commodities. The City offered easier ways to invest in them, ETC's etc. This investment lead to new highs for gold, crude oil etc. There's a bubble alongside the BRICs countries' rising demand, in it is your pension!
George, Watford, UK
Kevin,
Yes it's heavily taxed over here.
However, in America it' still high as a percentage of what a consumer might expect to pay. Yes, we pay more for fuel in "real money" but there are still sharp hikes in petrol prices across the pond.
Steve, Cheltenham,
Remember, not all BP, Esso and Shell are owned and run by the oil companies. By boycotting them you will hurting the independent owners, who are making very little profit in the sale of fuel. Also by using the supermarkets you will make life harder for them. Who supplies the supermarkets. BP etc
A Sutherland, Leeds,
Eventually rising oil prices will cause inflation in the rest of the economy as they did in the early nineteen seventies, when the price of oil multiplied four times. Those who live in Public Transport Land and their political representatives are walking blindly towards a similar economic disaster.
Michael, Great Yarmouth,
Keven its called GREED.
Dave, Mold, Flintshire
The problem is not the supply of crude but the lack of refining capacity which has not significantly increased since the 70s. Now the demand from the heavily subsidised developing nations is on the up refining capacity cannot meet the requirement. 60% of the increase is pure market speculation.
Marc, Manchester,
To Kevin of Norwich.
A litre of fuel in the US is about 35p - over here its £1.20.
This has nothing to do with supply and demand - it's UK government policy to tax us to death and then make more money out of inheritance tax.
Richard, London, UK
Pedro, Stratford
Cheers for that, i always wondered why it was more expensive as i've driven diesel for the last 6 years.
shane, blackburn, england
Goldman Sachs is one of the biggest buyers of oil contracts, so giving a high price prediction on oil futures, is highly speculative,and a conflict of interest on their part.
Sam, Dallas, USA
Most people in France have diesel cars and they were always more expensive second-hand due to the fact that diesel was about 30% cheaper.Now the price is about the same I'm glad that I bought a petrol car.
stephen hulton, eure, france
Jill , A gallon of Diesel costs more because it weighs 15% more than a gallon of unleaded, it therefore takes more feed-stock to make a gallon of diesel.
Also, the demand for Diesel is now so high that they have to use special techniques to avoid making surplus petrol.
Pedro, Stratford,
This has nothing to do with the Government. And it is incredible that any one thinks that it does. The reason for high-oil prices is very clear. Demand is outstripping supply. And as many oil fields are far past their peak with production falling fast the situation will only get much, much worse.
Erik, London, UK
I really don't understand this at all. Dear The Times please can you write an article explaining why oil prices are rising so rapidly.
Many thanks
Kevin, norwich, england
How expensive does oil need to get before Bush looks at serious long term alternatives? Oh, I forgot - he doesn't care about the future, as he'll be leaving at the end of the year and someone else will have to clean up his mess.
Steve, Aberdeen, UK
I always had my doubts about the rising price of oil but, the upside for the Government is that it is filling an otherwise black hole in revenue income. Once again the public pays but someone else gets the blame! Perfect!
Graham , Littlehampton,
If there is more oil in the market than we want - why is the price so high.
We have just paid £1.25 per litre for diesel. This should cost no more than unleaded! I am joining a boycott of all ESSO and BP petrol stations for the rest of this year in an attempt to do something!! JOIN US
Jill, Royston Herts, UK