Oil soars to new record over $135

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Oil prices hit a record high above $135 a barrel on Thursday, having rocketed by more than $4 a barrel on Wednesday.

 

US light, sweet crude for July delivery reached $135.09, taking its gain for the year so far above 40%.

 

The main driver was the US crude stocks figure, which showed an unexpected fall of 5.4 million barrels.

 

UK Prime Minister Gordon Brown is working with international partners to persuade the Opec oil producers\' cartel to increase supply.

 

His spokeswoman said that Mr Brown recognised the increases were having an effect on UK consumers and he would be raising this at the forthcoming EU and G8 summits.

 

So far, Opec has blamed price rises on speculators and said that there is no shortage of oil.

 

Rises set to continue…………………..

 

In addition to the falling US stocks, the continuing weakness of the US dollar was another factor cited as supporting prices.

 

The US Energy Information Administration blamed the fall in its stocks figure on a fall in imports and a pick-up in demand from refineries.

 

Graph of light, sweet crude prices in 2008

Oil prices have set new records in 10 of the last 14 trading sessions.

 

\"You really cannot forecast how much further the market will rally now,\" said Tatsuo Kageyama from Kanetsu Asset Management in Tokyo.

 

\"All I can say is the market will continue to rise.\"

 

London\'s Brent crude also set an intra-day high on Thursday, peaking at $135.14 a barrel.

 

Investors moving money into oil from other areas have also been blamed for rising prices.

 

\"Oil has performed better than equities and bonds,\" said Victor Shum from the energy consultancy Purvin and Gertz in Singapore.

 

\"There is money looking for better returns and oil has offered better returns and continues to offer better returns.\" - BBC

 

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