NEW YORK – World oil prices crossed the historic $120 a barrel for the first time on Tuesday as the market showed conviction that record prices will not necessarily trip up global demand.
Light, sweet crude for June delivery climbed $1.87, or 1.6 per cent, to settle at $121.84 a barrel after rising as high as $122.73.
Brent crude on the ICE futures exchange also rose to a record settlement of $120.31 a barrel, up $2.32.
The Energy Information Administration projected triple-digit prices for months to come, issuing a new monthly outlook that forecast crude prices averaging $114 a barrel in the second half of the year.
While the agency anticipates US demand will slip by 190,000 barrels a day this year to its lowest annual level since 2003, it expects emerging economies to keep world demand expanding 1.4 per cent, to 86.6 million barrels a day.
Crude oil has risen 27 per cent year to date and 97 per cent from a year ago on a combination of irrepressible global demand growth and supply troubles.