Oil surges to new high at $142.00
Pastor Dale Morgan
Oil surges to new high at $142.00*
* Graeme Wearden
* guardian.co.uk,
* Friday June 27, 2008
Oil hit yet another new high above $142 a barrel today, as shares
continued to fall in Europe and Asia and analysts predicted further
turmoil ahead.
A barrel of US crude reached a new all-time high of $142.26, nearly 50%
higher than the start of the year. Just hours earlier, the head of Opec
predicted it could spike as high as $170 in the next few months. London
Brent crude also hit previously unexplored heights, at $142.13 a barrel.
Bookmaker Ladbrokes is now refusing to take any more bets on US crude
hitting $150 a barrel this year. It has also cut its odds for Brent
hitting $200 a barrel this year, to just 5/6.
The rising oil price came on a day when most global stock markets were
in retreat following last night's heavy losses on Wall Street. In grim
trading in Asia, China's Shanghai stock index fell 5.3% to its lowest
level for nearly 16 months as traders feared a hike in interest rates.
In Japan, where inflation hit a 10-year high, the Nikkei lost around 2%.
Europe was also hit, with the German stock market almost 1% lower. In
London the FTSE 100 dropped almost 50 points in early trading but later
recovered to close up 11.7 points at 5529.9. The index is still at its
lowest level in three months - following the 147.9-point loss racked up
yesterday.
Analysts said that the markets are in nervous mood, following fresh
indications that the long-running turbulence in the financial sector may
still not be over. Yesterday the banks were hit hard after Goldman Sachs
claimed that Citigroup would have to write off another $8.9bn (£4.5bn)
in fresh sub-prime losses. This helped to wipe 3% off the Dow Jones
index, which closed at 11,453 last night.
There were further losses on Wall Street today, with the Dow 119.53
points lower at 11,333.39 by 6.30pm BST.
The anxiety was also fuelled by an extremely bearish research note
published yesterday by Albert Edwards, Société Générale's well-respected
strategist. He predicted that the FTSE would fall as low as 3,000 points
– just half of last year's peak – before the current crisis is over.
Other analysts also believe that there is more trouble ahead, although
their forecasts are not as bleak as Edwards's.
Lucy Macdonald of RCM predicted that the second half of 2008 would offer
"more of the same", although probably without the kind of rescue
packages and assistance which various central banks have offered this
year in an attempt to keep the financial markets operating.