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AP
Oil hits record above $121 on supply woes
Tuesday May 6, 9:58 am ET
By George Jahn, Associated Press Writer
Oil prices rise to record above $121 a barrel on supply worries

VIENNA, Austria (AP) -- Oil futures surpassed $121 a barrel for the first time Tuesday, the spike fueled by worries about threats to supply and a weakening of the U.S. dollar.
The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.

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Light, sweet crude for June delivery rose to a record $121.49 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday. The contract later retreated to $121.30 a barrel, up $1.33 from Monday's close.

Crude futures settled on Monday at $119.97 a barrel, up $3.65 from Friday's close.

"The bulls are in control of the market," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The economic report out of the U.S. yesterday on the service sector seems to suggest the economic slowdown may not be as deep as initially thought."

"The sentiment is that the oil pricing is likely going to stay quite strong, with a lot of volatility," Shum said.

Meanwhile, a Goldman Sachs analyst on Tuesday predicted that oil prices could reach $150 to $200 a barrel over the next six months to two years, but said that how far prices could climb still...