Oil prices hover at 30 month high

File photo / Thinkstock

Oil prices hovered at a 30-month high near US$113 a barrel yesterday in Asia, as traders eyed fresh Middle East tension and a wobbly United States dollar.

Benchmark crude for May delivery was up 6c at US$112.85 a barrel yesterday in electronic trading on the New York Mercantile Exchange. On Friday, the contract jumped US$2.49 to US$112.79, the highest since September 2008.

In London, Brent crude for May delivery was down 91c to US$125.74 a barrel on the ICE Futures exchange.

Oil prices have soared 33 per cent since mid-February, as traders worry political violence in the Middle East and North Africa could disrupt crude supplies.

"Fresh headlines over the weekend could portend another difficult week for oil bears," energy consultant The Schork Group said. "Gaza-Israel violence along with new protests in Tahrir Square [in Egypt] against the military could incite another buying frenzy in the market."

Investors are also watching closely the currency markets as the US dollar fell to a 15-month low against the euro last week. A weaker US currency makes dollar-based commodities such as oil cheaper for investors with other currencies.

The euro was down slightly at US$1.4466 yesterday from US$1.4483 late Friday.

Analysts expect the surge in oil prices will undermine consumer demand, but some are optimistic higher fuel costs won't derail the global economy recovery.

- AP