Oil prices above US$140 as OPEC president says prices could pass US$150

Source: Agencies  |   2008-6-27  |     ONLINE EDITION

CRUDE oil futures shot above US$140 yesterday after OPEC's president said crude prices could rise well above US$150 a barrel this year and Libya said it may cut oil production.

Light, sweet crude crossed the US$140 level minutes before the New York Mercantile Exchange closed Thursday, then retreated slightly to settle up US$5.09 at a record US$139.64. In after-hours electronic trading, prices rose as high as a record US$140.39.

In London, August Brent crude futures rose US$5.50 to settle at US$139.83 on the ICE Futures Exchange.

Oil's latest milestone came as Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, said he believes oil prices could rise to between US$150 and US$170 a barrel this summer. Khelil also said prices will decline later in the year, and aren't likely to reach US$200 a barrel.

Khelil joins a long list of forecasters who have made bold oil price predictions this year. Each new forecast, such as Goldman Sachs' recent prediction that prices could rise as high as US$200,causes a jump in prices as speculative buyers are drawn into the market.

Meanwhile, the head of Libya's national oil company said the country may cut crude production because the oil market is well supplied, according to news reports.

"Shokri Ghanem, the nation's top oil official, declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, in a research note.