Flip through the latest issue of Gulf Weekly.
The price of oil jumped to an 11-month high moving even closer to record levels hit last summer as fears mounted over shortages in supply.
Speculation in the world’s most actively traded commodity, rapidly rising demand and reports that production would slow over the next five years pushed Brent crude up to $77.07 this week, within $2 of the all-time high of $78.65 set last August.
Investors said hedge funds and pension funds were key drivers behind the latest rally.
“This rally is very much fund driven,” said Graham Sharp, director at Trafigura, a commodities trading group. “The entry of long-only hedge funds into the market is a major factor this time around. We wouldn’t rule out Brent hitting $80 this summer.”
Maintenance work on oilfields in the North Sea has tightened supplies and helped push the Brent significantly higher.
The market has been jittery all week after the release of the International Energy Agency’s medium-term oil market report warning that demand would increase faster than expected over the next five years while production would struggle to keep up.
Saudi Arabia’s Oil Minister Ali Al Nuaimi said tightness in supply and international political tensions were pushing prices higher.
By Angela Balakrishnan
