Crude oil at a fresh high of $140
Pastor Dale Morgan
*Crude oil at a fresh high of $140*
OPEC believes oil prices could go as high as $170 a barrel this year
BBC - The price of oil has surged to a fresh high passing the $140 a
barrel level.
Light sweet crude for August delivery touched $140.39 on the New York
Mercantile Exchange before edging down slightly.
The combination of soaring oil prices, rising inflation and fears about
the health of the global economy sent stock markets tumbling.
In the US, the Dow Jones industrial average fell 2.29% to 11,539.7 in
early evening trade.
Wall Street's tumble soured sentiment in Europe where shares fell to
their lowest close since October 2005.
The UK's FTSE 100 closed down 2.6%, or 147.9 points, at 5518.2, the
lowest level since March this year.
In Paris, the CAC 40 lost 2.4% to close at 4,426.19 and Germany's DAX
index also lost 2.4% ending up at 6,459.60.
Added pressure
The spike in the price of oil followed comments from the producers'
organisation Opec about the prospect of oil at $170 a barrel this summer.
Oil producer Libya added to the pressure after signalling it may cut
output, while a falling US dollar also pushed up the price of crude.
Analysts said a raft of bad news about the health of corporate America,
the impact of higher oil on company profits and fears about US financial
sector hurt investor confidence.
"I felt we were going to have a garden variety recession, but if oil
goes up goes up to $170 and stays in the $170 area, who knows," said Al
Goldman, chief market strategist at Wachovia Securities.
General Motors shares fell to their lowest level in 30 years after
analysts gave a gloomy outlook for the auto giant.
Global banking giant Citigroup fell too after a downbeat assessment for
the sector, while shares in Belgian bank Fortis fell sharply after it
announced a rights issue to shore up its finances.
Gloom spread to the technology sector, where software company Oracle and
Blackberry maker Research In Motion painted a pessimistic picture for
the future.