Oil hits new record above $145

London: Oil prices continued to soar on Thursday, shattering earlier records in markets across the world.

London Brent crude climbed $2.08 to reach $146.34, fuelling expectations that the price may soon cross the $150 barrier, as predicted by investment bank Morgan Stanley last month.

Light sweet US crude also passed a milestone, reaching over $145

Concerns over a larger-than-expected drop in US stockpiles, the upcoming July 4 holiday and the threat of conflict in Iran have contributed to the heightened price.
Earlier on Thursday, oil soared to a record above US$146a barrel in Asia as well.

Speculation that the European Central Bank will raise interest rates later on Thursday is expected to weaken the US dollar and drive oil prices even higher, as investors turn to commodities as a hedge against a falling greenback, traders said.

Prices may also be lifted with increased buying before US oil markets close Friday for the Fourth of July holiday.

The latest spike means a barrel of crude has gone up by more than half since the end of last year, when oil was going for US$96 a barrel.

Ongoing rhetoric about possible attacks on Iran, the world's fourth-largest oil producer and OPEC's second-largest exporter, also left the market jittery.

Tehran's threat to halt shipments and seize control of the strategically important Strait of Hormuz if attacked by Israel or the United States have raised fears among traders, subsequently affecting oil prices.