Crude oil prices have touched new highs closing at a record US$127 a barrel, despites news of higher output from Saudi Arabia. Crude futures are being supported by supply disruptions in oil-producing nations, particularly Nigeria, robust demand from China ahead of the Summer Olympics and a weak US dollar which makes dollar-priced oil relatively cheaper for buyers using other currencies. The benchmark futures contract touched an intraday high of US$127.28, short of its all-time peak of US$127.82. In London, Brent crude contract for June settled at US$125 a barrel.
The week began with Saudi Arabia boosting oil output by 300,000 bpd to meet demand and compensate for lower output from other producers. In its latest monthly report, the independent Centre for Global Energy Studies said that oil prices would continue to rise unless there was a worldwide recession. Goldman Sachs, predicted last week that oil prices would jump to US$141 during H2-2008.