Oil touches $146 amid Iran warning

Oil tightened its squeeze on world economies today soaring to a new high of over $145 a barrel. Eurozone growth is also expected to take a further hit when the European Central Bank is expected to raise rates to curb inflation.

In London, the continuing threat of an attack on Iran, the world's fourth largest oil producer, sent Brent crude to $145.75 a barrel, while in Asia, oil for August delivery was trading at $144.35 - more than 30 per cent higher than prices at the end of last year.

The European Central Bank prepares to lift the interest rate above 4 per cent today, which analysts are expecting to hit the dollar and force investors to sink their money into commodities.

At the same time, it has emerged in the US that fuel stockpiles are down by 2 million barrels, 800,000 barrels worse than expected, while investors are spooked that Iran could withhold oil supplies if talk of an attack by either America or Israel continue.

Around 40 per cent of the world's oil tanker traffic passes through the Strait of Hormuz, and a closure could push prices significantly higher.