The price of oil continued to soar yesterday, with Brent crude rising above $146 per barrel (p.b.) for the first time ever.
Brent crude rose by $2.08 to $146.34p.b. in London, and US light, sweet crude rose by more than $1 to $145.22.
Oil prices have risen significantly since the US government announced on Wednesday that its crude stockpiles had fallen by more than expected last week.
A barrel of Brent crude has risen by almost $4 since the beginning of the week.
Unleaded petrol is currently 118.95 pence per litre on average and diesel 132.20p.
Oil exporting nations group OPEC president, Dr Chakib Khelil of Algeria, warned before yesterday’s rise in eurozone interest rates, that such a rates hike would weaken the dollar further, and could cause oil prices to rise even further.
The European Central Bank (ECB) increased its main interest rate by a quarter of a percentage point to 4.25% from 4%, while overnight, the dollar had traded at its lowest level against the euro for more than two months, falling to $1.5891 per euro.
The ECB rates hike was in response to rising food and fuel costs which have seen inflation in the eurozone hit an annualised rate of 4% this week, the highest rate since official records began in 1996.
Meanwhile, in the USA on Wednesday, General Motors share prices fell to their lowest level in more than 53 years, amid a warning that GM faced bankruptcy.
With US consumers cutting back and buying smaller fuel-efficient cars, GM’s shares hit a low of $9.96, before closing down 15% at $9.98.
The share price touched its lowest level since September 1954, when the stock hit $9.92 during trading.
GM shares have fallen 60% so far this year, and the motor giant has lost $51 bn in the last three years.
Banking giant Merrill Lynch predicted that GM shares will fall even further, bankrupting the company.
Merrill Lynch analyst John Murphy said: ‘We believe there is potential downside in the stock below $7 and that bankruptcy is not impossible if the market continues to deteriorate and significant incremental capital is not raised.’
• MPs in the House of Commons yesterday followed the advice of prime minister Brown and Tory leader Cameron and voted to reject a 4.4% inflation-busting pay rise.
Sir John Baker’s review of Westminster pay had recommended that MPs’ pay be linked to the public sector average earnings index, and include a £650-a-year ‘catch up’ payment.
But Brown urged ‘restraint’ making it clear he would instead prefer MPs to accept a rise of 2.2%.
Cameron also urged ‘restraint’.