Crude surges past $129

Opec continues to ascertain that the market is well supplied, but light sweet crude oil remains in high demand, while heavy sulphur-laden crude seems to be less popular.

Technically the market looks strong too, analysts say. MFGlobal’s John Kilduff states that: “On a technical basis, the crude oil continuation chart looks healthy to us. The recent consolidation around $125 has provided a base for prices to move higher, and momentum favours further gains. Admittedly, the market is overbought on relative-strength basis, with today's reading at 72, but we have seen the market ignore greater readings, previously.”

The Nymex light crude June contract, which expires later on Tuesday, rose to an all-time high of $129.58 a barrel today. London Brent crude was up $2.15 at $127.21. ICE gas oil futures, which includes diesel, rallied more than 2.5% to a record of $1,238.75 a tonne.

Speculation that China would need to import more fuel in the aftermath of its earthquake has continued to drive oil prices. Also, concerns over tightness in the gasoline market ahead of the US driving season are said to be spurring prices higher.

The weak US dollar has also been linked with surging oil prices, as investors look to buy into commodities instead of the greenback.

Oil investor T Boone Pickens forecast that prices would reach $150 this year and last week, Goldman Sachs forecast that oil would reach $141 a barrel.

The Opec producers’ cartel has said that it will not meet until its scheduled gathering in September to discuss increasing oil output - despite US calls for it to act to cool prices.