Crude oil futures rocketed to a new trading record of 117 U.S. dollars a barrel on Friday, capping a week of record highs.
The front-month contract hit 117 dollars a barrel in electronic trading after markets closed. Crude oil for May delivery gained 1.83 dollars, or 1.6 percent, to settle at 116.69 dollars a barrel on the New York Mercantile Exchange.
It was the fifth day in a row crude prices set new records. Crude has been bullish in the week.
Crude oil for May delivery on Monday rose 1.62 dollars to close at 111.76 dollars after reaching an intraday high of 111.99 dollars a barrel on the New York Mercantile Exchange. It rallied 2.03 dollars to close at 113.79 dollars the next day.
The momentum remained unchanged Wednesday with crude rising 1.14 dollars to close at a record high of 114.93 dollars.
Although crude dropped seven cents Thursday to close at 114.86 dollars, it surged to a new trading record of 115.54 dollars overnight and finally closed the week Friday at a new record of 116.69 dollars.
A host of supply and demand concerns in the United States and abroad, along with the dollar's weakness, have served to support prices. Crude prices have risen as much as 4 percent this week, according to analysts.
Major factors contributing to the price surge include:
-- The closure of a Royal Dutch Shell PLC pipeline with a daily capacity of 1.2 million barrels in the U.S. Midwest due to a leak.
-- In Nigeria, Italian energy giant ENI said sabotage has cut crude output from one of its facilities by about 5,000 barrels a day.
-- An International Energy Agency report says that Russian oil production dropped this year for the first time in a decade, raising concerns whether the key oil-producing nation will have enough supply to help feed growing global demand.
-- The announcement by Mexico's Merchant Marine about the close of the Pacific oil port of Salina Cruz, although that terminal is not a major supplier for the United States.
-- The U.S. Energy Information Administration (EIA) said in a weekly report that crude inventories fell unexpectedly, down 2.3 million barrels to 313.7 million barrels in the week that ended on April 11, which made traders even more worried about crude supply.
-- A militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.
In addition, the weakening dollar is widely believed as the major factor driving high the crude prices over the week and has been a consistent price-lifting factor for the crude.
Most analysts blame the oil price surge on weakness in the dollar, which hit several new lows over the week. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak.
Interest rate cuts further weaken the dollar, and have helped fuel oil's rise, especially with another reduction expected next Tuesday at the Federal Reserve's regularly scheduled monetary policy meeting.
Some analysts hate to make long-term prediction for the crude, but in the short term, momentum could push crude prices higher still, according to Brian Hicks, co-manager of the Global Resources Fund at U.S. Global Investors.
However, he said, "at some point, seasonal factors will come into play and we will see a pullback in the second quarter."
Crude was just under 96 dollars a barrel on the first trading day of this year, which means the price has soared by some 20 percent so far.
Source:Xinhua
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