LONDON (AFP) — Oil prices eased on Monday but held near 140 dollars per barrel after rocketing to record heights late last week, sparking a fresh call from consumer nations for higher global production.
Crude soared beyond 139 dollars on Friday after a shock jump in US unemployment sent the dollar reeling and Wall Street plunging by more than three percent amid warnings that the global economy could tip into recession.
On Monday, New York's main oil futures contract, light sweet crude for July delivery, dipped 35 cents to 138.19 dollars a barrel.
The contract had spiked on Friday by 10.75 dollars a barrel -- its biggest-ever one-day jump -- after soaring past 137, 138 and 139 dollars to hit an all-time high of 139.12 dollars.
On Monday, Brent North Sea crude for July delivery handed back 44 cents to 137.25 dollars. Brent had hit a lifetime pinnacle of 138.12 and gained 10.15 dollars in value on Friday.
"Wow. What else can anyone say?" said Cameron Hanover analyst Peter Beutel in reaction to the breath-taking surge.
He said: "Equities traders all saw the rise in oil prices for what it is -- an economy buster."
Last week's record run beat the previous record highs of 135.09 dollars in New York and 135.14 in London, that were set on May 22.
Beutel added: "For us, Friday was as dark a day as we have seen. We fear that many of our world leaders have failed to grasp its significance."
Over the weekend, eleven nations that guzzle nearly two-thirds of the world's energy called for an urgent hike in global oil production as host Japan warned the world could plunge into recession.
Energy ministers from the Group of Eight (G8) industrial powers met on Sunday in the northern Japanese city of Aomori with officials from China, India and South Korea in the wake of the record oil price spike.
The 11 nations represented voiced "serious concerns" over the level of oil prices and said there was an "urgent need for increased and timely investment in the energy sector."
"If we leave this situation as it is, it could lead to a recession of the world economy," Japan's energy minister Akira Amari said as he opened the meeting.
Oil prices have soared five-fold since 2003 due to a variety of factors, including turbulence in the Middle East and rising demand in emerging economies such as China and India.
This year alone, prices have rocketed by almost 40 percent amid growing fears about tight supplies, the weakening US currency and production outages in key producers -- particularly in Nigeria.
However, Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore, said the recent sharp jump in prices was a market overreaction.
"It is not surprising that there is a bit of a pullback after such a sharp increase," Shum said.
"The increase in oil prices has nothing to do with supply and demand, and fundamentals did not change."
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