Oil prices breach 135 dollars for first time
They later pulled back to just below 133 dollars owing to profit-taking.
Brent North Sea oil struck a historic height of 135.14 dollars a barrel and benchmark New York light sweet crude hit an all-time peak of 135.09 dollars on Thursday.
"It seems there is no stopping to soaring oil prices," said Andrey Kryuchenkov at the Sucden brokerage in London.
"Investors doubt that the market will be able to meet ever growing demand in the long run, with booming emerging market economies underpinning robust demand for energy," he added.
After posting fresh highs, New York's main oil futures contract, light sweet crude for July delivery, pulled back to 132.83 dollars a barrel, a drop of 34 cents from Wednesday's close.
In London, Brent North Sea crude for July delivery was up nine cents at 132.79 dollars.
Crude futures have risen by more than a third since the beginning of 2008 when they struck 100 dollars for the first time, lifted by unrest in oil-producing countries, falling energy inventories, OPEC's unwillingness to hike output, high Asian demand for fuel and a weak dollar.
At current prices, crude oil is in fact a relatively cheap energy source, with a barrel being less expensive today than in 1974 in terms of purchasing power, the head of French energy giant Total said in an interview.
Christophe de Margerie also told the weekly stock market publication Revenu that given production complications oil was unlikely to fall very much below 80 dollars a barrel.
"I know that this can be surprising: oil is not a particularly costly form of energy when compared with other consumer goods," Margerie said.
"In terms of purchasing power a barrel costs less than it did in 1974. And if the price appears unable to discourage demand in China and in other emerging market countries it's because new consumers in these countries do not have our memories of earlier price levels," he argued.
Oil prices breached 130 dollars for the first time on Wednesday and continued higher on news that US energy inventories had unexpectedly fallen last week.
"Currently, market psychology is trumping fundamentals" of supply and demand, said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"The psychology is that the oil market is tight. Even though there is no shortage, global oil demand continues to grow and supply growth is restrained," he added.
"Oil has performed better than equities and bonds. There is money looking for better returns and oil has offered better returns and continues to offer better returns."
Global oil supplies could meanwhile fall far short of need and expectations in the next 20 years, the International Energy Agency is concluding with a vast effort of detective work on production prospects, a newspaper report said on Thursday. [...]
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"These are some signs: the woes of the affliction that vexed many will prevail vast, the miseries caused by the bereavers of nations will wax great, and squabblings will add to the contentions of the bees for honey." - Quoted from an old entry in one of my blogs.
Who are the bees? What are they contending about? What are those things that they consider as honey? Why will there be squabblings?
If you consider yourself a "good bee", then in these hard times you should pursue more diligently for the "real nectars", rather than lazily settle for some "easy sugar". Don't merely "gamble" your seed, rather plant it in the "good soil" so that it may bring a real good harvest in due time. There are no shortcuts and quick gains in the economy of the Lord.