LONDON, 1 April 2005 — World oil prices surged yesterday, pushed upward by a wave of speculative buying, with interest ignited by a Goldman Sachs study that suggested levels of more than 100 dollars a barrel, dealers said. New York’s main contract, light sweet crude for delivery in May, soared 1.41 dollar to $55.40 per barrel in early deals, after peaking at 55.55 dollars.
In London, the price of Brent North Sea crude oil for delivery in May rocketed $2.04 to $54.13 a barrel, after a peak of $54.40. “We seem to be going through another wave of fund buying ... not only by the hedge funds but also by the pension funds,” said Societe Generale analyst Deborah White. “Commodities are so hot right now. What has set off the wave of buying today is the Goldman Sachs report that talked about a super spike,” she added.
Goldman Sachs analyst Arjun Murti predicted (US) oil prices are in the early stages of what it called a “super spike” period. They raised their upper range forecast from a previous estimate of $80 per barrel to $105 per barrel on the back of “strength in oil demand and economic growth, especially in the United States and China”, Murti said.
The dollar fell against leading currencies here yesterday as a better-than-expected survey of business activity in the Chicago region finally weighed less than disappointing US jobs data. The euro rose to 1.2967 dollars from 1.2911 late on Wednesday in New York. The dollar fell to 107.19 yen from 107.35 on Wednesday. The euro was changing hands at 1.2967 dollars against 1.2911 late on Wednesday in New York, 138.96 yen (138.85), 0.6866 pounds (0.6871) and 1.5498 Swiss francs (1.5495).
Asian stocks fared better yesterday after recent losses, posting solid gains as a Wall Street rebound inspired a cautious rally ahead of key US economic data due Friday, dealers said in Tokyo. They said there was some relief when US data showed fourth quarter growth at 3.8 percent, unchanged from initial estimates and below forecasts for 4.0 percent.
Japanese share prices closed 0.89 percent higher, getting some support from a strong bounce on Wall Street overnight but trade was cautious ahead of the Bank of Japan’s Tankan business sentiment survey due today, dealers said.
South Korean share prices closed 1.07 percent higher as Wall Street’s overnight bounce and easing crude oil prices encouraged foreign investors to turn buyers after 20 days of selling, dealers said in Seoul.