UPDATE 10-Oil hits record near $130 as supply fears grow

                                
 (Updates details)
                                
 By Richard Valdmanis
                                
 NEW YORK, May 20 (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 <CLc1> settled up $2.02 at $129.07 a
barrel, after hitting a high of $129.60 during the session.
London Brent crude <LCOc1> 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. [ID:nN20331784]
                                
 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". [ID:nN20322903]
                                
 Energy analysts say an OPEC decision to raise output could
help ease the price rally, which they say has been fueled
largely by resilient world energy demand even as the United
States economy slows.
                                
 "Slackening U.S. demand is being offset by brisk offtake in
Asian countries, and to a lesser extent in Europe, where the
stronger euro is cushioning the price increases," said Edward
Meir of MF Global.
                                
 Last week's earthquake in China has further tightened up
world fuel supplies by boosting demand for diesel to be used in
electric generators.
                                
 PRICEY OUTLOOK
                                
 Investment banks Societe Generale and Credit Suisse raised
their oil price forecasts for 2008 Tuesday by $14 to $115 a
barrel and by $29 to $120 a barrel, respectively.
[ID:nL20784581]
                                
 Last week, Goldman Sachs predicted oil prices would average
$141 in the second half of this year and added that crude
prices for delivery far into the future would also likely rise
sharply as oil companies have trouble accessing new reserves to
feed demand growth.
                                
 "This is due to 'the revenge of the old political economy'
(resource protectionism), which imposes significant policy
constraints on the free flow of capital, labor and technology
that are substantially limiting supply growth," Goldman said in
a report.
                                
 U.S. crude oil prices for delivery in December 2016 settled
up $8.40 on Tuesday at $138.38 a barrel. [ID:nN20333772]
                                
 A weekly report from the U.S. Energy Information
Administration to be released Wednesday is expected to show
increases in crude and refined products supplies, according to
a Reuters poll of analysts. [EIA/S]
 (Editing by Marguerita Choy)