Oil prices hit record high near $58

Oil prices raced to a new all-time peak on Monday, climbing towards $58 a barrel.

    The rising prices are hitting US motorists hard

    US light crude hit a record $57.79 a barrel, surpassing Friday's high of $57.70, which was triggered by a forecast that prices could spike above $100 due to robust global demand and tight spare capacity. At 0201 GMT, US crude was up 19 cents at $57.46.

    Following the increase, the Organisation of the Petroleum Exporting Countries (Opec) signalled it would discuss a second output rise to try to quell the market's relentless rally.

    "I would have thought prices would struggle to go much higher. The market fundamentals suggest lower prices," said Mark Pervan, an analyst with Daiwa Securities in Melbourne.
       
    "I think they will struggle to get over $60 in the next couple of weeks - that is a big psychological barrier." 
       
    Output rise

    Opec President Shaikh Ahmad al-Fahd al-Sabah said on Saturday that he probably would start consulting member producers over a 500,000 barrel-per-day (bpd) increase to group supplies to cool the market. 


    "I would have thought prices would struggle to go much higher. The market fundamentals suggest lower prices. I think they will struggle to get over $60 in the next couple of weeks - that is a big psychological barrier"

    Mark Pervan,
    Daiwa Securities, Melbourne

    Opec lifted output limits by 500,000 bpd to 27.5 million bpd in mid-March and left room for a second rise before a June ministerial meeting if prices failed to ease below $55.
       
    "We had suspended [consultations] for a period of time because of the decline in prices," al-Fahd said.
       
    "But now, the reality of prices requires that we once again undertake communications for the purpose of consultations with the fellow OPEC oil ministers ... pertaining to the 500,000-bpd hike."
       
    Nigerian Presidential Adviser on Petroleum Edmund Daukoru said on Sunday that the increase could happen within two weeks if prices stayed above $55 for at least the next 10 to 14 days. 
       
    Supply

    US oil prices have surged 33% this year, with big-money speculative funds buying heavily on signs that rapid demand growth in Asia's emerging economies and the United States would strain world supply.
       
    Prices have gained more than $3 since Thursday, when top energy derivatives trader Goldman Sachs released a report saying oil markets might have entered a "super-spike" period that eventually could drive them toward $105.
       
    Concerns about the adequacy of US gasoline stocks before the peak summer demand season were partly behind last week's price jump after a handful of refiners had production problems.
     
    US gasoline futures struck a new all-time high on Monday at $1.7380 a gallon.

    SOURCE: Reuters


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