(EnergyAsia, February 24 2012, Friday) — The embattled Eurozone economy is facing the additional threat of record-high oil prices as Brent crude surged to a new all-time high after breaking 93.46 euro, its previous record set on July 3 2008.
A combination of a weaker Euro, Iran’s threats to expand its oil embargo on Europe beyond UK and France, and rising threat of a war between Iran and the West all helped Brent crude reach its new peak of nearly 94 euro in US trade on February 23.
In US dollar terms, the global benchmark climbed to a nine-month high of US$124.50 a barrel, still far below record of over US$147 a barrel reached in July 2008.
Bogged down by infrastructure constraints and insufficient storage capacity in Oklahoma, US benchmark WTI has been held back and is still a long way from approaching US$147 last seen on July 23 2008. WTI has been trading at a nine-month above US$107 a barrel.
Despite the weakness in the world economy, some traders believe oil could climb higher on geo-political tensions and supply disruptions in the Middle East and Africa.
Vitol, the world’s largest oil trader, believes Brent could exceed US$150 if tensions between the West and Iran escalates further.