MercoPress. South Atlantic News Agency

Oil market remains extremely bullish

Oil prices continued Wednesday their record breaking surge in spite of the United States government reporting the highest commercial inventories in eight months.

A barrel of benchmark Brent crude oil touched 54,06 US dollars in London, (1,96% increase), while in New York the US light crude reached 55,45 US dollars the barrel, (1,57% rise).

Extreme temperatures in the northern hemisphere, the US dollar weakness, solid demand from Far Eastern markets and the coming OPEC meeting in Iran, played a role in the latest sprint with investors switching out of the currency market and into commodities.

A falling greenback also prompted several consumer nations and funds with strong currencies to increase their oil holdings, denominated in dollars, and compete for limited supplies.

The US Energy Administration Office reported that crude stocks rose to 302,6 million barrels, the first time since last July that they toppled the 300 million barrels.

A report from the industry supported American Petroleum Institute showed an even higher rise in stocks, 304,3 million barrels.

The sustained growth of the Chinese economy, expected to expand a further 8/9% this year also influenced fears that demand may outstrip supply in the coming months.

OPEC is scheduled to meet in Iran where a new higher band price is forecasted to be established prompting some analysts to believe the cost of oil may climb even higher possibly close to 100 US dollars the barrel.