Oil prices reached a new high above $71 a barrel Tuesday as persistent concerns about Iran's nuclear program and supply disruptions in Nigeria overshadowed a new report from OPEC forecasting weakening global demand.
There was no fresh catalyst for Tuesday's buying, but analysts said the market psychology would likely remain bullish until there is some resolution to a variety of geopolitical uncertainties, particularly the West's nuclear dispute with Iran.
Global Insight oil analyst Kevin Lindemer said rising inventories of crude oil in the United States and signs of slower growth in consumption would typically help pull down prices, but "all of that is getting swamped right now by Iran and Nigeria."
Light, sweet crude for May delivery on the New York Mercantile Exchange surpassed the previous intraday record of $70.85, set Aug. 30, rising to $71.15, an increase of 75 cents from Monday's record closing price.
In London, Brent crude for June delivery at the ICE Futures exchange also hit an all-time high of $72.20 a barrel, before easing back to $71.73 a 27 cent increase from Monday's close.
With gasoline prices averaging $2.79 a gallon, U.S. motorists are shelling out $212 million per day more than a year ago, and President George W. Bush said Tuesday he was "concerned" about the impact this was having on American families and small businesses.
"We will feel real pain at the pump before this market tops out," said James Cordier, president of Liberty Trading in Tampa, Florida, who predicted prices could rise as high as $3.50 a gallon in some parts of the country this summer, reports AP.
Russian President Vladimir Putin has refused to go to the 77th UN General Assembly in September