Crude oil prices rose for the first time above $129 a barrel in New York as investors fear supplies are insufficient to meet global demand, and as major firms rose its forecasts for oil prices.
Boone Pickens chairman of BP Capital LLC, said oil will rise to $150 a barrel in 2008 on supply worries. He said that producers are running out of oil at CNBC today, Bloomberg noted.
Last Friday, crude prices soared amid Goldman Sachs' analyst's projections that oil will increase to $141 a barrel on the second half of the year. Comments that there is eventually a deficit in crude inventories have been continuously heard over the past weeks.
Crude oil for June delivery rose $1.88, or 1.5 percent, to $128.93 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange after reaching a record $129.60.Futures hit an all time record of $129.31 a barrel earlier.
June's contract is expiring on Tuesday 20, rising speculation that it could hit $130 before the end of the day.
Credit Suisse Group AG and Societe Generale SA increased their oil prices forecasts for 2008 and 2009 observing more investors traffic and tight inventories.
Supporting prices today, the dollar recorded losses against the euro falling as much as 1.1 percent to $1.5677. A weak dollar causes investors to buy commodities as a hedge against inflation.
At the same time demand rises as commodities denominated in dollars become cheaper for buyers with foreign currencies.
The U.S. currency has slumped since the U.S. Federal Reserve started its program for cutting interest rates to avoid an economic recession in the top world economy. The Fed has slashed interest rates seven times since September 18.
Brent crude futures for July delivery rose $2.53 or 2.05 percent to $125.64 a barrel on the London ICE Futures Exchange. The contract soared to $127.90 a barrel today.