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Oil Prices Soar to New Record High Near $128 a Barrel

The price of crude oil soared to yet another record high Friday in trading on the New York market.

The price of a barrel of oil for future delivery surged about $3, and went as high as $127.82 a barrel.

The price hike follows declines in the value of the dollar, strong oil demand from China, and a prediction by experts at the Goldman Sachs investment bank that oil could rise to an average price of $141 a barrel in the second half of this year.

Worries about high prices are prompting the U.S. Energy Department to suspend purchases of oil for the U.S. strategic petroleum reserve. The action follows a congressional vote this week to stop filling the reserve until oil prices fall to $75 dollars a barrel.

The government had been buying about 76,000 barrels of oil a day to fill the reserve. President Bush had argued that the reserve is needed and the amount of purchased each day is too small to significantly boost demand and prices.

The U.S. reserve can hold 727 million barrels of oil and it is now nearly full with a bit more than 700 million barrels.

Some information for this report was provided by AFP, AP and Reuters.

 

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