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Crude oil hits new record near $121

05/07/2008

Singapore — World oil reached a new record price near $121 a barrel as concerns over the United States economy eased, analysts said.

New York’s main oil futures contract, light sweet crude for June delivery, reached an all-time high of $120.93 a barrel during Asian hours before dropping back in late afternoon trade when it was three cents lower at $119.94 a barrel.

The contract crashed through the symbolic $120 ceiling for the first time on Monday and closed at a record $119.97 on the New York Mercantile Exchange.

Brent North Sea crude for June delivery was 24 cents higher at $118.23 a barrel, after settling at a record $117.99 on Monday in London. The contract had earlier hit an intra-day high of $118.58.

Oil futures prices on both sides of the Atlantic have nearly doubled in a year and have continued to soar since the benchmark New York contract broke through $100 at the start of 2008.

Energy Secretary Angelo Reyes, meanwhile, said the government would not allow the charging of “unreasonable prices” for oil products during a meeting with oil companies and other stakeholders at the Department of Energy (DoE) offices in Fort Bonifacio, Taguig City.

While he admitted that the DoE cannot dictate prices of oil products, Reyes assured the public that the government would ensure transparency and reasonableness in the setting of oil prices by oil companies.

“The regime of high oil prices is a reality and the government will ensure that oil companies are in compliance with existing laws and regulations. We will not allow unreasonable pricing. Sen. Juan Ponce Enrile is planning to craft an anti-trust law which will prevent monopoly in the oil business,” Reyes said.

He also stated that “in the long-term, we are instituting measures that will lessen the country’s dependence on oil imports such as pushing the development and increased contribution of renewable energy to our energy mix.”

During the meeting, Edgar Chua, chairman of Pilipinas Shell Petroleum Corp., made a cost breakdown of oil products and enumerated the factors affecting oil product prices.