NEW YORK (Bloomberg) — Crude oil rose above $129 a barrel in New York for the first time after billionaire hedge-fund manager Boone Pickens said oil will reach $150 a barrel this year because supply isn't keeping up with demand.

Producers are "running out of oil," Pickens, the founder and chairman of Dallas-based BP Capital LLC, said on CNBC yesterday, reiterating comments he made to Bloomberg News on April 29. Goldman Sachs Group Inc. and Deutsche Bank AG also said in the past month that prices would rise.

"It's not just Boone Pickens; just about every big global bank has raised its price forecast in recent weeks," said John Kilduff, vice-president of risk management at MF Global Ltd. in New York. "When prices last fell below $20 in 2001 there was a surplus. That's no longer the case. There's now a deficit."

Crude oil for June delivery rose $2.02, or 1.6 percent, to settle at a record $129.07 a barrel at 2.56 p.m. on the New York Mercantile Exchange after reaching an all-time high of $129.60. Prices have doubled from a year ago. A strengthening of the euro against the dollar added to the gains.

The June contract expired yesterday. The more-active July futures contract rose $2.26, or 1.8 percent, to settle at $128.98 a barrel. Contracts for delivery in 2011 and 2012 rose more than four percent, a signal that investors don't expect prices to drop. The contract for December 2016 climbed $9.52, or 7.3 percent, to $139.50 a barrel.

Oil advanced above $127 for the first time on May 16 when Goldman Sachs boosted its estimate for the second-half of the year to $141 a barrel, from $107, citing supply constraints. Credit Suisse Group AG and Societe Generale SA raised their oil price forecasts for 2008 and 2009 yesterday, citing investor flows and limited supply. The weakening dollar prompted the purchase of commodities as a hedge against the currency's decline. The European Central Bank may keep rates at a six-year high to curb inflation.

German consumer prices rose 2.6 percent in April from a year earlier after jumping 3.3 percent the previous month, the most in 12 years, according to the Federal Statistics Office in Wiesbaden.

The dollar has declined since September 18, when the Federal Reserve began cutting rates to ease financial-market strains and stave off a recession. The US central bank cut rates seven times while the ECB left rates unchanged. The dollar fell one percent to $1.5664 per euro at 3.37 p.m. in New York.

"Oil is up because the dollar is being pounded on the bigger-than-expected increase in German inflation," said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. "The likelihood that the ECB will cut rates to be more in line with those in the US is reduced by the German inflation numbers."

The Organisation of Petroleum Exporting Countries' oil- export revenue will be over $1 trillion this year, the US Energy Information Administration said.