Brent oil price soars to US$72

“We have broken new ground today,” said Victor Shum, energy analyst with Purvin and Gertz in Singapore. “The market sentiment is bullish, with yesterday’s record closing, momentum has been built up to cause a wave of buying.”

Light, sweet crude for May delivery on the New York Mercantile Exchange surpassed the previous intraday record of US$70.85 a barrel in European electronic trading before easing back to US$70.75. That was still 35 cents higher than on Monday, when the contract settled at a record closing price of US$70.40 a barrel.

The previous intraday high was set August 30, shortly after Hurricane Katrina lashed at the US Gulf Coast and wreaked havoc on the region’s oil industry.

In London, Brent crude for June delivery at the ICE Futures exchange also hit an all-time high of US$72.20 a barrel, before easing back to US$71.91 — a 45 cent increase from Monday’s close.

OPEC expressed particular concern about the impact rising interest rates would have on consumer spending in the US, where gasoline demand grew at a slower rate in the first quarter and could “carry over into the second half of the year.”

Still, analysts said oil prices were likely to climb further as long as geopolitical risks in Iran and Nigeria posed threats to supply.

Crude oil production is only barely keeping up with rising global demand, leaving a slim margin for error if there is a prolonged supply interruption, experts say. Traders are anxious that US-led efforts to stop Iran, OPEC’s second-largest member, from pursuing a suspected nuclear weapons programme would lead to a disruption in Persian Gulf supplies. And in Nigeria, militant attacks have led to the shutdown of crude oil production.