Speculations that OPEC members cannot pump more to meet rising demand, has pushed crude oil prices to record highs of US$57.50 a barrel in New York. Crude oil futures touched US$57.50 a barrel, the highest since the contract was introduced in March 1983 and a 49% increase in the past 12 months. In London, the May Brent crude-oil futures contract rose to US$55.50 a barrel on the International Petroleum Exchange. Brent futures reached $56.15 a barrel, the highest since trading began in 1988
OPEC, producing about 40% of the world's oil, raised its output quotas to 27.5 million bpd on Thursday and will let inventories increase in Q2, when consumption usually drops. Lack of spare production has brought nervousness to the market.
However, runaway world demand until economic growth slows down will continue to accelerate oil prices. Higher prices may fuel inflation, slow economic growth, and have stalled stock market gains. Oil prices at such high levels is affecting economic growth. Industries such as automotive, aren't doing that well.
With approaching warmer weather, high gasoline inventories, and more OPEC production on the way, the price of crude seems poised to fall. Will oil prices touch US$60 before they return to more trend-like price increases?