Page last updated at 21:17 GMT, Tuesday, 20 May 2008 22:17 UK

Supply fears push oil beyond $129

Azadegan oil field, Iran
Producers cartel Opec has played down supply fears

Oil prices have surged past $129 a barrel as Opec comments that it would not be boosting output in the coming months increased concerns about supply.

Speculation that China would need to import more fuel in the aftermath of its earthquake also continued to drive prices, analysts said.

US light crude hit $129.60 a barrel before falling back to $129.07. London Brent crude added $2.78 to $127.84.

Oil investor T Boone Pickens forecast that prices would reach $150 this year.

Last week, prices were supported by Goldman Sachs forecasting that oil would reach $141 a barrel later this year.

Observers said that other factors spurring on the market included limited supplies of refined products such as diesel ahead of the US driving season.

'Upward impetus'

The weak US dollar has also been strongly linked with surging oil prices, as investors look to buy into commodities instead of the greenback.

The Opec producers' cartel has said that it will not meet until its scheduled gathering in September to discuss increasing oil output - despite US calls for it to act to cool prices.

This was "further weighing on supply concerns and adding to upward price impetus" said Bank of Ireland analyst Paul Harris.

Opec president Chakib Khelil said earlier this week that speculators were responsible for the price increases, not traditional supply and demand.

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