Oil shot to a record high near $128 a barrel today after Goldman Sachs, the most active investment bank in energy markets, forecast a continued spike in prices through the end of the year due to thin supplies.
The rally came as Saudi Arabia rebuffed an appeal from US President George W Bush for more oil supplies to ease pressure on the US economy.
US crude gained $2.50 to $126.62 a barrel by 4pm after touching a peak of $127.82 earlier in the day. London Brent also hit a new high of $126.34 before falling back to $125.11.
Oil prices have risen six-fold since 2002 and doubled since last year as rising demand from China and other developing nations outpaced new supply.
Goldman Sachs raised its forecast for average oil prices for the second half of 2008 to $141 a barrel from $107 because of tight supplies.
