Weak dollar pushes oil near $130

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Oil prices have hit another intra-day high, flirting with the $130-a-barrel price level on increased concerns about supply and the weaker dollar.

In Asian trading, light, sweet crude hit $129.75 before falling back slightly to $129.45.

Meanwhile, oil for delivery in 2016 was trading at around $130 – suggesting that this is the price firms expect to be paying in eight years time.

Two weeks ago, Goldman Sachs said that a barrel could fetch $200 by 2010.

In recent weeks, the rise in the oil price has been attributed to nerves about supply.

China factor

However, the dollar weakness is also driving the oil price higher as investors look to buy commodities as a hedge against the currency, observers say.

“We’ve seen an about-face turn on the dollar in the last couple of days,” said Mark Pervan, a Melbourne-based senior commodity strategist at ANZ Bank.

“It looked like it was starting to recover, but I think there’s a less certain outlook at the minute.”

Speculation that China would need to import more fuel in the aftermath of the earthquake there is also supporting prices, analysts say.

Other factors thought to be spurring the oil price include the limited supply of refined products such as diesel ahead of the US driving season.