Thursday March 6, 2008 - 11:49:27 GMT
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Reuters - www.reuters.com
FOREX NEWS - Oil hits record above $105 on dollar, OPEC, supply
By Ikuko Kao
LONDON, March 6 (Reuters) - Oil hit a record high above $105
on Thursday as a weak dollar helped prices to extend the
previous day's gains, which were prompted by a drop in U.S. oil
inventories and OPEC's decision to keep output unchanged.
U.S. light crude for April delivery CLc1 struck a new
record of $105.40 a barrel and was trading 70 cents higher at
$105.22 by 1104 GMT.
London Brent crude LCOc1 was up 60 cents at $102.24,
shortly after setting a new record of $102.37.
"The crude squeeze continues. The sharp rise in crude was
exacerbated by a weak U.S. dollar, OPEC's decision to stand
still," Citigroup said in a research note.
The dollar fell to a record low against the Swiss franc and
hit a fresh trough against the euro <EUR=> on Thursday.
On Wednesday, U.S. crude had settled $5.00 higher after U.S.
Energy Information Administration data showed a 3.1 million
barrel drop in crude stocks, against analysts' forecast for an
Distillate inventories, including heating oil, fell 4.8
million barrels, dropping for the fourth consecutive week as
colder weather boosted heating demand in the U.S. Northeast.
Gasoline stocks rose again to another 14-year high.
Citigroup said that U.S. crude and product stocks altogether
fell 4.5 million barrels, while a seasonal norm for this time of
the year was a 3.3 million barrel drop.
OPEC on Wednesday decided to leave its output unchanged,
dismissing a call from the United States, the world's top energy
consumer, to act to tame prices. [ID:nL0574090]
The oil producer group's ministers also decided to meet next
in September and not to call a further extraordinary meeting.
But they could confer informally at a conference between
consumers and producers in Rome on April 20-22. [ID:nVAT000299]
"This suggests to me the cartel would allow prices to move
sharply higher without adding extra barrels to the marketplace,"
said Robert Laughlin with MF Global in a research note.
Tensions in Venezuela, an OPEC producer and the third
largest oil supplier to the United States, provided further
support to the market.
Venezuela deployed tank and air and sea forces towards the
Colombian border on Wednesday in its first major military
mobilisation in a crisis that has raised fears for regional
(Maryelle Demongeot in Singapore and Ikuko Kao in London)
Â© Reuters 2008 All rights reserved
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