Oil prices continue to rise

20 May 2008

Oil prices are continuing to increase, rising 29 cents in Asian trading.

US light, sweet crude oil is now priced at $127.34 (£65.03) a barrel, close to the unprecedented levels reached recently, the Associated Press reports.

A record level of $127.98 was struck last week, despite an announcement by Saudi Arabia that it is to increase oil output.

Oil minister of the country Ali al-Nuaimi said oil production in Saudi Arabia is to rise to 300,000 barrels a day earlier this month, but values have failed to drop.

Victor Shum, an analyst with energy consultancy Purvin and Gertz, told the news agency that a "major correction" in oil prices does not appear to be on the horizon.

"The tightness in the market continues to empower investors to ply money into oil ... so (prices) are likely to test the psychological level of $130 in the near term," he said.

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