Crude oil prices hit a fresh record high at the weekend and analysts expect oil to crash through the $US80 a barrel barrier soon.
Light sweet crude oil shot up to $US75.78 a barrel in New York trading - eclipsing its previous record set last week in the aftermath of North Korea's missile salvo - before easing back to below $US75.
AMP Capital Investors chief economist Shane Oliver said the geopolitical tensions with North Korea could not have come at a worse time.
"The next three months often see oil prices rise on the back of the northern hemisphere summer driving season and the hurricane threat to oil production in the Gulf of Mexico," Dr Oliver said.
"Any further escalation in tensions around Iran or South Korea would only add to this."
"Clearly the world oil price is continuing to move up in a two steps forward, one step back process, which is likely to continue as long as supply remains constrained and demand for oil remains strong, as it still does."
U.S. energy analyst Steve Bellino said $US80 was "definitely within reach".
"I just don't know if it's going to happen within a month or within two months," Mr Bellino said.
Fellow U.S. analyst Bart Melek painted a moore gloomy picture.
"Given the spare capacity situation and market sensitivity to any chatter surrounding the Middle East and hurricanes, light crude prices could easily reach the $90 dollar-plus mark if something material were to happen on any of those fronts," he said.
Traders said global concerns - particularly Iran and North Korea - would continue to overshadow the market.
However, adjusted for inflation, current crude prices remain below the adjusted value of $US85 reached after the 1979 Iranian revolution.
Light sweet crude oil shot up to $US75.78 a barrel in New York trading - eclipsing its previous record set last week in the aftermath of North Korea's missile salvo - before easing back to below $US75.
AMP Capital Investors chief economist Shane Oliver said the geopolitical tensions with North Korea could not have come at a worse time.
"The next three months often see oil prices rise on the back of the northern hemisphere summer driving season and the hurricane threat to oil production in the Gulf of Mexico," Dr Oliver said.
"Any further escalation in tensions around Iran or South Korea would only add to this."
"Clearly the world oil price is continuing to move up in a two steps forward, one step back process, which is likely to continue as long as supply remains constrained and demand for oil remains strong, as it still does."
U.S. energy analyst Steve Bellino said $US80 was "definitely within reach".
"I just don't know if it's going to happen within a month or within two months," Mr Bellino said.
Fellow U.S. analyst Bart Melek painted a moore gloomy picture.
"Given the spare capacity situation and market sensitivity to any chatter surrounding the Middle East and hurricanes, light crude prices could easily reach the $90 dollar-plus mark if something material were to happen on any of those fronts," he said.
Traders said global concerns - particularly Iran and North Korea - would continue to overshadow the market.
However, adjusted for inflation, current crude prices remain below the adjusted value of $US85 reached after the 1979 Iranian revolution.
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