June 30, 2008 11:59 am
Oil surged to a new record above $143 a barrel on Monday as the dollar fell and worries about Iranian supply deepened.
Nymex August West Texas Intermediate rose $3.25 to $143.50 a barrel as the US dollar, in which oil is priced, weakened to a three-week low against the euro. Brent crude rose $3.38 a barrel to $143.69.
The commander of Iran’s Revolutionary Guards warned at the weekend that Iran would impose controls on shipping in the Gulf oil route if his country was attacked.
“Any confrontation between Iran and non-regional countries would surely be extended to oil which would definitely lead to a huge increase in prices,” Mohammad-Ali Jafari told the state-owned Jam-e Jam newspaper.
The Strait of Hormuz, a narrow waterway between Iran and the Arabian Peninsula, accounts for about 40 per cent of the world’s traded oil flows. Worries about an attack on Iran have intensified this month after reports that Israel had practised such a strike in the eastern Mediterranean.
Oil prices have jumped more than 40 percent this year and is heading for its biggest six-month gain since 1999 as investors seek to protect themselves against rising inflation and falling corporate earnings.
The falling value of the dollar has also boosted oil prices. On Monday the dollar fell to $1.5804 against the euro, the highest level in three weeks. The euro has gained 14 per cent against the US currency in the last year.
Last week Chakib Khelil, president of Opec, warned that oil prices could soon rise to $170 a barrel.
Meanwhile, copper prices rose as miners in Peru, the world’s second-largest copper producer, went on strike. Peru’s largest federation of mining unions said a nationwide strike had started, though it was not immediately clear what effect the action would have on production.
London Metal Exchange copper for delivery in three months rose $44 to $8590, taking its gains since the start of the year to 29 per cent.
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