NEW YORK: Oil prices jumped $5 to a record high above $147 a barrel yesterday amid growing worries about threats to supplies from Iran and Nigeria.
US crude settled at $145.08 a barrel, up $3.43, after climbing as high as $147.27 earlier in the day and adding to gains of $5.60 from Thursday. London Brent crude settled at $144.49 a barrel, up $2.46.
"I'm seeing profit-taking here after the run-up to a new record, but we are going into a weekend and with all these things being reported on Iran, you wouldn't want to go short," said Alaron Trading analyst Daniel Flynn.
Oil also swept back into record territory after the European single currency briefly leapt above $1.59. The weak dollar boosts demand for dollar-priced oil which becomes cheaper for buyers using stronger currencies.
"As ever, the market remains very sensitive to any potential supply disruptions and geopolitical tensions," said Sucden analyst Andrey Kryuchenkov.
In addition, Iraq's Defence Ministry said that it had no knowledge of Israeli air force drills in its airspace, contrary to a media report carried on the Jerusalem Post website that sparked crude early yesterday.
"As martial rumours are denied, participants are reverting their gaze on the deteriorating global economy," said MF Global vice-president Mike Fitzpatrick.
Missile tests this week by Iran, against a backdrop of rising tensions with Israel and the US, has left the oil markets worried about a potential supply disruption from the world's number four exporter.
Iran has threatened to strike back at Tel Aviv and US interests in a key oil shipping route if it is attacked over its nuclear programme, which Israel and the West fear is aimed at making weapons.
Support also came from supply threats in Nigeria. The main militant group in Nigeria's oil-producing region said it was abandoning a cease-fire to protest against a British offer to help tackle lawlessness.
Oil prices have risen seven-fold since 2002 amid surging demand from China and other emerging markets, and jumped 50 per cent this year alone, battering the economies of consumer nation's already hit hard by the global credit crunch.
Investors also have flocked to oil and other commodities this year as a hedge against inflation and a weak dollar.
