OIL prices could hit $50 a barrel by the end of the week, an anaylst has warned.

The cost of crude soared to a 21-year high of more than $47 a barrel amid concerns over global supplies.

Prices have risen to new records on an almost daily basis since the end of last month, sparking fears motorists will face higher prices at the petrol pumps.

Orrin Middleton, analyst at Barclays Capital, said the cost of oil was moving towards the $50 mark. He said: "It is a question of when, not if."

Despite fears of the effect of oil prices on the economy, Bank of England Governor Mervyn King last week said there was no need for panic.

He said that, allowing for inflation, oil prices were still only half the level they reached at the end of the 1970s, and said that Britain does not use as much oil today due to industrial changes.

Airline Bmi said it would increase its fuel surcharge on long-haul flights with immediate effect because of the rise in prices.

The carrier, which runs flights to London Heathrow from Teesside International Airport, said its surcharge would rise from £5 for a return flight to £12, although the domestic and short-haul routes will not be affected.