Jun. 10 – Oil prices in the region reached more US$71 a barrel, driven by investors placing their money in oil as safety against the weakening U.S. dollar and anticipated inflation from fiscal stimulus spending.
The price is the highest for the year so far. The commodity has spiked more than 100 percent in the last three months because of news of a bottoming U.S. recession.
The benchmark crude for July delivery was up US$1.41 at US$71.42 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange, reports the AP.
“I wouldn’t be surprised if we’re testing US$80 in a week or two,” Gerard Rigby, energy analyst with Fuel First Consulting in Sydney told the AP. “The momentum right now is too strong.”
Yesterday, the Energy Department’s Energy Information Administration (EIA) said that crude prices may stabilize to US$67 a barrel by the second half of the year, an increase of US$16. This is in contrast to when the EIA set its price-per-barrel forecast last month at US$55 for the same period.
The Energy Department added that demand for oil will rebound by next year when the global economy recovers.
