MercoPress. South Atlantic News Agency

Oil breaks records and closer to 150 USD forecast

Oil futures shot above 140 US dollars a barrel on Thursday after OPEC's president said crude prices could rise well above 150 US dollars a barrel this year and Libya said it may cut oil production.

Light, sweet crude crossed the 140 US dollars level minutes before the New York Mercantile Exchange closed Thursday, then retreated slightly to settle up 5.09 at a record 139.64. In after-hours electronic trading, prices rose as high as a record 140.39. Oil's latest milestone came as Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, said he believes oil prices could rise to between 150 and 170 US dollars a barrel this summer. Khelil also said prices will decline later in the year, and aren't likely to reach 200 a barrel Meanwhile, the head of Libya's national oil company said the country may cut crude production because the oil market is well supplied, according to news reports. Hoever Shokri Ghanem Libya's top oil official, declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration. Oil prices have more than doubled over the past year on concerns about rising demand in fast-growing economies such as China and India, and supply disruptions in the Middle East and Nigeria. The dollar's protracted decline against the Euro has also been a major factor behind oil's rise, as many investors buy commodities such as oil as a hedge against inflation when the dollar falls. Analysts have also attributed oil's rapid climb to speculative buying, with traders jumping into the market purely on the expectation that futures will continue to rise. Oil futures were also rising as investors reassessed comments the Federal Reserve made Wednesday when it held a key interest rate unchanged. Many investors who had expected the Fed to raise interest rates in August now think a rate hike is unlikely until after the November election or next year. Many analysts believe the Fed's rate cutting campaign, which began last September, had much to do with weakening the dollar against the Euro and sending oil prices skyrocketing. The dollar slid against the Euro after the Fed's comments Wednesday, and was down again on Thursday.