Oil prices top US$147 on Iran, dollar concerns
LONDON - Oil prices rocketed to record highs above 147 US dollars on Friday as traders seized on the weak US currency and tensions over Iran and Nigeria at the end of a very volatile trading week.
London's Brent North Sea oil for August delivery jumped as high as 147.50 US dollars to beat the previous record of 146.69 US dollars set on July 3.
New York's main oil contract, light sweet crude for August, also topped 147 US dollars for the first time to reach a historic 147.21 US dollars.
Oil prices swept back into record territory after the European single currency leapt as high as 1.5913 dollars -- not far off the historic peak of 1.6019 that was hit on April 22.
The weak dollar boosts demand for dollar-priced oil which becomes cheaper for buyers using stronger currencies, analysts said.
"Crude futures continued to rally today (Friday), extending their gains from yesterday on renewed geopolitical and supply fears," said Sucden analyst Andrey Kryuchenkov.
"As ever, the market remains very sensitive to any potential supply disruptions and geopolitical tensions," he added.
Oil rallied by almost six US dollars on Thursday on the back of simmering geopolitical tensions over key producer Iran and worries over stretched global crude supplies, traders said.
Oil had dived below 140 US dollars on Monday as a result of a then strengthening US currency, underlining the extreme volatility that the market is currently experiencing.
On Friday, traders continued to track Iran, which is OPEC's second-biggest crude oil producer with output of about 4.0 million barrels per day.
The White House played down the risk of war between Iran and the United States, despite Iranian missile tests and some tough talk by US Secretary of State Condoleezza Rice.
Rice warned Iran that Washington had beefed up its security presence in the Gulf and would not hesitate to defend its ally Israel.
Iran insists its nuclear drive is aimed solely at generating energy but some Western nations fear it could be aimed at making an atomic bomb and have called for a freeze of uranium enrichment.
OPEC would not be able to replace Iran's oil production if supplies were halted in case of a war with Israel or the United States, the oil cartel's chief has said.
In crude producer Nigeria, meanwhile, kidnappers seized at least one foreigner working for a German company in the restive Niger Delta oil region, a police source said on Friday.
The delta has seen numerous kidnappings targeting foreign energy firms, claimed by militants who demand a greater share of the oil wealth for the region's inhabitants.
Violence in the southern delta region has already reduced Nigeria's total oil production by a quarter since January 2006.
Record oil prices have sparked protests worldwide as people struggle to cope with soaring costs of energy. - AFP/ir