OIL hit another record high yesterday, climbing above $122 a barrel amid warnings that supply fears could push prices to $200.
US light crude for June delivery reached $122.73 per barrel before falling back to $121.84.
The latest spike came as a report from investment bank Goldman Sachs said oil prices could fetch $150-$200 a barrel within two years as supplies tightened. The current level is more than 25% up from the start of the year and has nearly doubled from about $62 a barrel a year ago.
Goldman Sachs’ report was blamed for much of yesterday’s buying, with fears over production in oil-rich nations such as Nigeria, Russia and Mexico also contributing. In a research note, Goldman Sachs analyst Arjun Murti said the world was in the midst of a “super spike” in oil prices which would ultimately force demand to fall sharply.
John Hall, managing director of energy consultant John Hall Associates, said such a jump was unlikely. But, he added: “The perception is that no one has got any more oil to produce. There’s just this view that there is a short or medium-term problem and if something goes wrong it will get worse.”
Prices have been supported in recent days by supply disruptions in Nigeria and northern Iraq.
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