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Oil sets new record above $147 a barrel

(Agencies)
Updated: 2008-07-11 22:56

"There's always a fear premium in pricing. The tensions in Iran and the threat of supply disruption will help support oil prices," said Jeff Brown, managing director of FACTS Global Energy in Singapore.

The Organization of Petroleum Exporting Countries warned Thursday that it cannot replace the shortfall if Iran is attacked and takes its crude supplies off the market.

Also Thursday, Nigeria's main militant group said it would resume attacks in the oil-rich region because of Britain's recent vow to back the government in the conflict there. Unrest over the past two years have already lowered the nation's typical daily oil output by a quarter.

JBC Energy in Vienna, Austria, said the news about Iran and Nigeria -- as well as a reported threat of a strike by oil workers in Brazil -- were "enough to wake the market from its two-day slumber."

Meanwhile, the dollar weakened against other major currencies Friday. The falling dollar has been a major factor behind the surge in crude oil, which is denominated in dollars; oil's rise has not been as severe for countries with stronger currencies, and meanwhile, traders have been using commodities as a hedge against the tumbling US currency.

In other Nymex trading, gasoline futures rose to a new trading record of $3.631 a gallon before easing back to $3.6194, up 10.85 cents. Heating oil futures rose to their own trading record of $4.1586 before falling to $4.144 a gallon, up 10.66 cents.

Natural gas futures rose 14.1 cents to $12.436 per 1,000 cubic feet.

August Brent crude rose to a new trading record of $147.50 before easing back to trade $4.82 higher at $146.85 a barrel on the ICE Futures exchange in London.

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