7 Days

Dubai, May 22: The price of oil raced past $130 a barrel for the first time yesterday in a wave of anxiety about stretched supplies and strong demand for energy. New York’s main oil futures contract, light sweet crude for July delivery, reached a record pinnacle of $130.47. It later pulled back slightly to stand at $130.15, still a rise of $1.17 on Tuesday’s close.

Light sweet crude for delivery in December 2016, the most forwardly-traded contract, stood at $138.38. “Crude futures made fresh record highs above $130 as the US dollar depreciated to a one-month low... which prompted further interest in crude as a means of hedging against US currency exposure,” said Sucden analyst Nimit Khamar.

“From observing the price movements over the last six months, it can be seen that prices retrace back about $10 after hitting each psychological mark, so perhaps the break above $130 a barrel could now see a retracement back to $120 before the next leg-up,” Khamar added. Crude futures have jumped by nearly a third since the start of the year, when they struck $100 a barrel for the first time, as investors reacted to geopolitical unrest in oil-producing countries amid tight supplies and strong Asian demand for energy.

Tony Nunan, of Mitsubishi’s  international petroleum business, said concerns over supplies not meeting demand were driving prices higher. “The market is technically and fund-driven right now,” he said yesterday, referring to investors buying into oil in hopes for higher returns. In London, Brent North Sea crude hit a record of $129.92.