| Supply concerns? Inventories are building, not falling ... |
A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of Tuesday's buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.
Light, sweet crude for June delivery jumped to a new record of $122.73 a barrel before retreating to settle up $1.87 at a record $121.84 on the New York Mercantile Exchange. In other Nymex trading Tuesday, June gasoline futures rose 5.26 cents to settle at $3.1055 a gallon after earlier setting a new trading record of $3.126. June heating oil futures rose 4.7 cents to settle at $3.3535 a gallon after rising to their own trading record of $3.3712, and June natural gas futures fell 2.8 cents to settle at $11.15 per 1,000 cubic feet. In London, June Brent crude futures rose $2.18 to settle at $120.31 a barrel on the ICE Futures exchange.
The Energy Department raised its oil and gasoline price forecasts, but also predicted that high prices will cut demand more than previously thought.