Friday May 9, 12:38 PM
Oil hits series of records above $125 on strong fund interest
LONDON (Thomson Financial) - Oil hit a series of records above $125, its latest at $125.48, as fund money rushed into the complex ahead of the weekend.
Prices were also strengthening because of a weaker dollar, which increased the appeal of dollar-denominated commodities, and as analysts upgraded their price expectations.
At 12:05 p.m., New York-traded West Texas Intermediate crude for June delivery was up $1.72 to $125.41 a barrel.
In London, Brent crude for June delivery was up $2.13 to a record price of $124.97 a barrel.
'We should end the day on a firmer note, if for no other reason than the fact that there are probably not too many sellers around heading into the weekend,' said MF Global analyst Edward Meir.
Goldman Sachs (NYSE: GS - news) analysts this week predicted prices will rise as high as $150 to $200 a barrel within two years. That forecast has driven much of oil's gains in recent days.
Analysts at Goldman and investment groups such as Barclays Capital and BlackRock (NYSE: BLK - news) believe tight global supplies and growing demand from fast-growing economies in countries such as China and India are driving oil higher.
Meanwhile OPEC Secretary General Abdalla Salem El-Badri on Thursday reiterated his position that oil supplies are adequate, and that there is no need for the cartel to boost production. He said several Organization of Petroleum Exporting Countries' oil projects are coming on line, but he noted that several member countries are having a hard time finding buyers for their additional supplies.
His comments effectively shun consumers who are calling for more oil amid record prices.
El-Badri agrees with analysts who feel speculative investment driven by the dollar's protracted decline is the real reason behind higher prices.
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