Oil hits record near $130 as supply fears grow

By Richard Valdmanis

NEW YORK (Reuters) - Crude oil prices scaled a new peak near $130 a barrel on Tuesday amid deepening worries over tight global stockpiles and signals from OPEC that no additional supplies are forthcoming to ease the crunch.

Billionaire investor T. Boone Pickens said Tuesday he expected oil to hit $150 a barrel this year. The prediction came on the same day two investment banks raised their 2008 crude price forecasts and two weeks after Goldman Sachs said a barrel could fetch $200 by 2010.

"There's a feeling that some of these forecasts of $150 oil might be right," said Peter Beutel, president of Cameron Hanover. "So why not buy it now, rather than later?"

U.S. crude oil futures settled up $2.02 at $129.07 a barrel, after hitting a high of $129.60 during the session. London Brent crude rose $2.78 to $127.84 a barrel.

Oil prices have risen sixfold since 2002 as surging demand in China and other developing economies strained supplies and drew in a wave of investor interest.

Members of the Organization of the Petroleum Exporting Countries have repeatedly rebuffed calls for more supplies from consumer nations hard hit by the inflation in fuel costs, saying the rally is due to rampant speculation and not to any supply shortage.

On Tuesday, Venezuela Energy Minister Rafael Ramirez and OPEC Secretary General Abdullah al-Badri reiterated that they think oil markets are well supplied.

The U.S. House of Representatives approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies, but the White House threatened to veto the measure because it could spur "retaliatory action against American interests in those countries".