Oil prices likely to touch $200 a barrel

London, May 23:

The oil price soared to a new record for the third day in a row on Friday, reaching $135 a barrel, more than double the price a year ago.

Repeated calls from the US for oil-producing countries to raise output to calm the market have fallen on deaf ears as producers blame speculators and the weakness of the dollar for high prices, rather than supply constraints. Abdullah al-Badri, OPEC secretary general, said the cartel saw no problems with the fundamentals of oil supply and demand. “Even if we increase output tomorrow, the prices will not come down.”

Libya’s leading oil official, Shokri Ghanem said, “It is out of our hands. $200 a barrel

is not logical but even $135 is not logical, so yes oil could reach $200 a barrel. Why not?” Though the price slipped back from the new record in later trading as the dollar strengthened, analysts believe it will push higher.

The latest surge in prices has been driven by fears about supplies after the US Energy Information Administration said crude oil stockpiles had fallen last week, contrary to market expectations. In the UK, energy minister Malcolm Wicks, said the British government was talking to oil-producing nations to help curb rising prices.

“Talking to the energy producers is the key thing,” he said.