World oil prices surged to fresh record highs above 123 dollars per barrel Wednesday amid concerns about tight supplies and lingering unrest in oil-rich Nigeria, traders said.
Oil prices have rocketed in recent months spurring concern that sharp price hikes could trigger inflationary pressures which may hamper global economic momentum.
New York crude oil prices struck new highs, smashing Tuesday’s price record of 122.73 dollars, despite a larger-than-expected rise in weekly US energy stockpiles.
New York’s main oil futures contract, light sweet crude for June delivery, closed at a record 123.53 dollars a barrel after striking an intra day trading peak of 123.80 dollars.
The contract leapt 1.69 dollars compared with Tuesday’s close.
In London, Brent crude hit an all-time peak of 122.70 dollars, before settling at 122.32 dollars, up a strong 2.01 dollars from a day earlier.
Prices continued to rise Wednesday despite a weekly survey by the US government showing that the country’s crude stocks rose by 5.7 million barrels to 325.6 million barrels for the week ended May 2.
The US investment firm Goldman Sachs forecasted on Tuesday that world oil prices could strike 200 dollars a barrel within two years. Goldman Sachs correctly predicted three years ago that oil values would break through 100 dollars, which they did in January.
Traders said a combination of forces have pushed prices higher, including market speculators and a decision by the Organization of the Petroleum Exporting Countries not to hike output quotas.
Ongoing violence in Nigeria, Africa’s largest crude producer, has helped push oil prices to new all-time highs.
“Support stemmed from continued unrest in Nigeria where a string of attacks by rebels calling for a greater share of the country’s oil wealth have shut-in a sizeable element of its production,” said analysts at energy consultancy John Hall Associates.
“Concerns over further Turkish incursions into Iraq in pursuit of Kurdish separatists also underpinned price movements,” the analysts said.
Nigerian militants attacked an oil ship off the coast of the west African country and took two people hostage over the weekend.
The incident on Saturday came after oil wells operated by the Anglo-Dutch oil group Shell and a flow station in southern Bayelsa state were attacked, leading to a cut in the company’s output.
Such attacks have cut Nigeria’s oil production by about a quarter over the past two years.
Angst over oil prices has also been stirred by the ongoing diplomatic tensions over Iran’s nuclear ambitions which Tehran says are peaceful. Iran is OPEC’s second-largest producer.