Prices rose earlier today because Iran test-fired more missiles in the Persian Gulf and a Nigerian militant group said it will end a cease-fire this week. The increase accelerated after futures broke through the previous day's high of $138.28 at 2:09 p.m. after approaching it at least five times today.
Crude oil for August delivery rose $5.60, or 4.1 percent, to settle at $141.65 a barrel at 2:53 p.m. on the New York Mercantile Exchange, the biggest one-day increase since June 6. Prices rose as much as $6.05 to $142.10 a barrel today. Oil touched a record $145.85 on July 3. Futures are up 95 percent from a year ago.
Iran, holder of the second-biggest oil reserves, tested missiles capable of reaching Israel, increasing concern that a conflict may cut supply. The Movement for the Emancipation of the Niger Delta said attacks will resume attacks on oil facilities.
Iran's military today fired the missiles during a third day of war games, Agence France-Presse reported, citing the Web site of Iranian state-run television. Missiles were also launched yesterday.
Iran has ignored United Nations efforts to halt its uranium- enrichment program and says further sanctions won't affect its plans to develop nuclear energy. The U.S. has led international efforts to force Iran to give up enrichment because of concern the technology may be used to develop nuclear weapons.
OPEC Secretary-General Abdalla El-Badri said at a press conference in Vienna today that he hoped there would be no military conflict between Israel and Iran, adding that ``if something were to happen, it is impossible to replace the production of Iran.''
The Nigerian militant group known as MEND will call off its unilateral cease-fire beginning midnight on July 12, the group's spokesman, Jomo Gbomo, said today. MEND has helped cut more than 20 percent of Nigeria's crude oil exports since 2006 by attacking pipelines and other installations.
MEND says it is fighting for a greater share of oil wealth for the impoverished inhabitants of the Niger Delta and accuses successive Nigerian governments of decades of oppression.
The group declared a unilateral cease-fire after a June 19 attack against Royal Dutch Shell Plc's Bonga deep-water oilfield, located 120 kilometers (75 miles) offshore, that cut 190,000 barrels a day of oil output.
The International Energy Agency increased its 2008 demand forecast for the first time in six months today, because of rising consumption in developing countries.
The Paris-based agency increased its outlook by about 0.1 percent, or 80,000 barrels a day, to 86.85 million barrels a day in its monthly report, leaving demand growth at 1 percent for this year. The IEA forecasts the same pace of growth for 2009.
The Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, cut its forecast of demand for its own crude oil through 2030, as record prices and environmental considerations encourage consumers to conserve fuel and rely more on biofuels.
OPEC lowered demand forecasts by 4.4 percent to 32.3 million barrels a day in 2015, and by 12 percent to 43.6 million a day in 2030, the group's secretariat said today in its World Oil Outlook report. This means OPEC may unnecessarily commit $300 billion to new fields over the next 12 years, it said.