MercoPress. South Atlantic News Agency

Crude ends week with another high

Oil prices vaulted to a new peak over US$75 a barrel yesterday as investment funds snapped up crude futures and tension mounted over Iran's nuclear intentions.

US light crude oil for June delivery settled up US$1.48 at US$75.17 a barrel, after hitting a record US$75.35, while London Brent crude settled up US$1.39 at US$74.57 a barrel.

US oil has rallied about 23 percent this year on supply concerns and as investment funds seeking high returns among diverse assets poured billions of dollars into commodities.

"It's turned around, and it seems to be related to the injection of capital that we believe is coming from pension and mutual funds," said Deborah White of SG CIB Commodities. "All week it has been like this, a cross-commodities rally."

Base metals markets also raced to record highs yesterday.

Adding support, a war of words between Iran and the West over Tehran's resolve to continue its nuclear programme triggered concern that oil supplies from the world's fourth biggest exporter could be disrupted.

The Iranian president said yesterday that Iran should rely on domestically produced gasoline starting in September, a move that would make the country less vulnerable to sanctions.

A senior US official said yesterday that Russia must stop any arms deals with Iran. Washington wants Moscow to cancel the planned sale to Iran of surface-to-air missiles.

"It's time for countries to use their leverage against Iran," said senior State Department official Nicholas Burns.

Russia strongly opposes the use of sanctions against Iran.

Iran has scoffed at the idea of US military action to halt its nuclear activities and gave no hint of compromise on Thursday before a visit by U.N. inspectors to assess Iranian compliance with Security Council demands.

President George W. Bush has vowed to stop Iran from getting atomic weapons and has refused to rule out military options, including nuclear strikes, if diplomacy fails.

Members of the Organization of Petroleum Exporting Countries were set to meet informally in Qatar on the sidelines of discussions between energy consumers and producers. But several OPEC ministers have said there is little more the group can do to bring down high prices as the cartel is already pumping at near full capacity.