Sam Fletcher
Senior Writer

The US dollar at record lows against the euro, China's robust demand for diesel, and market concerns about supply and demand have pushed up oil prices more than 18% so far this year, said analysts in the Houston office of Raymond James & Associates Inc. in mid-April.

At Barclays Capital Inc., London, Paul Horsnell reported, "The drift up in prices and the continuation in the reduction of resistance to higher prices along the curve are still very much a function of perceived imbalances into the future. If we are correct in our view that non-OPEC supply will be at best very weak in 2008 and is likely to fall, despite a decade of rising prices, the impact on perceptions of the long-term clearing price is likely to be a powerful one and likely to be more powerful than any perceived position in the short-term economic cycle." He predicted, "The price highs of the year are not yet in."

Adam Sieminski, global energy economist for Deutsche Bank, said, "We believe the oil price remains mesmerized by the course of the US dollar. If as we expect [the euro] hits $1.62, it would imply the oil price rising to $118/bbl. However, it would require oil prices hitting $145/bbl for the market capitalization of energy companies on the Standard & Poor's 500 to represent a similar share as tech stocks at the peak of the internet bubble."