The price of oil has hit an all-time high in London, rising above $146a barrel, with New York crude prices not far behind. Tendai Maphosareports for VOA from London analysts do not see an end to the priceincreases anytime soon.

Oil well pumps

The prices of crude have reached record levels, but the bad news, analysts say, is they have not peaked yet.

JohnMitchell, an energy analyst at the London research center ChathamHouse, tells VOA prices will keep rising unless there is a sharp dropin demand.

"This has been building up quite slowly, but now itis very serious and therefore people are responding to it. It takestime for that response to take effect but people are already ... youhave seen car sales in the United States go down very drastically andthe switch from big cars to small cars that will take an effect overthe next year or two, so I would certainly be very surprised if we sawprices anything like this high in one year or two years time," he said.

U.S.Treasury Secretary Henry Paulson, who is visiting London, also saysthere are no quick fixes and prices would keep rising. He met withBritish Chancellor of the Exchequer Alistair Darling to discuss oilprices and other economic issues.

Darling said there is a needfor a global response. "The problems that our economies face today arevery much international in nature. Whether it is the credit crunchwhich is now affecting every country in the world or the huge threatposed by very high oil prices and the inflationary effect that can haveor rising food prices. These are international problems that will needcountries to work together and the United States and the United Kingdomshare a common interest and we have a shared commitment."

Mitchellsays while high prices are causing difficulties in rich countries, theywreak havoc in the developing nations. "I think we will see it in thedeveloping countries because there the price shock is much more severewhere they have been protected by subsidies from the price so far butgovernments cannot continue to subsidize at these prices so there isreal problems there and it is difficult for them to switch or toeconomize transport the basic need and I think we will see trouble,riots, protests, great political difficulties for the importingcountries."

The plain facts of supply and demand are widelyblamed for the rising prices. But, some reports are also blamingmarket speculators for driving prices higher, as well growing tensionin the Middle East, especially the continuing speculation that Israelmight attack Iran's nuclear facilities.