NEW YORK (AFP) — Oil prices struck a series of new highs Tuesday, with New York crude crossing 114 dollars a barrel, on concerns that supply outages will pressure crude stockpiles, with the weaker dollar continuing to lend support, analysts said.
New York's main oil contract, light sweet crude for delivery in May, rose 2.03 dollars to close at a record high of 113.76 dollars a barrel. Earlier it hit an intraday all-time peak of 113.99 dollars.
In after-market electronic trading, the New York benchmark contract crossed 114 dollars a barrel for the first time, hitting 114.08 dollars.
In London, Brent North Sea crude for May struck its own record intraday high, at 112.08 dollars a barrel. The contract expired with a gain of 1.47 dollars at a record 111.31 dollars.
Expectations that Wednesday's inventory report from the US Department of Energy (DoE) will show US gasoline and heating oil inventories declined further last week were also underpinning gains, analysts said.
"The petroleum markets are building on Monday's gains, after crude oil posted a new all-time high close," said Citigroup analyst Tim Evans.
"With Mexico's crude oil exports cut off due to poor weather conditions and a report that Chinese diesel demand was up 49 percent for March, the market is freshly sensitive to supply worries."
"Expectations for Wednesday's DoE report are also generally supportive, with projected draws in the products seen exceeding the moderate seasonal build in crude oil," he added.
Recent production outages are causing particular concern amid longer-term worries over stockpile levels in major consumer countries, analysts said.
Mexico said Monday it had closed four export terminals due to bad weather, while oil giant Shell said shipments over its 1.1 million barrel per day Calpine pipeline in the southern United States had been temporarily disrupted.
Meanwhile, reports also emerged of minor supply outages in Nigeria, Africa's biggest oil producer, after rebels caused a fire at the Beniboye oil plants in the Delta State of Nigeria.
While all of these outages are in themselves relatively minor, the fact the incidents have so closely followed one another is stoking supply fears among investors already spooked by current inventory levels.
"The physical oil market appears tight and appears highly sensitive to news of any supply interruption," said Fairfax analyst John Mayer. "Further supply issues are expected in Nigeria and other difficult areas for the industry."
Prices could be set to rally further on Wednesday should the weekly DoE inventories report prove supportive, according to analysts.
OPEC on Tuesday left unchanged its 2008 estimate of growth in world oil demand, arguing that while high prices and slowing economies would brake demand in major industrialized countries, appetite for crude would remain robust elsewhere.
The cartel, which pumps 40 percent of global crude output, added that soaring prices reflected high volatility in the market.
However, it said that such volatility was primarily due to "non-fundamental" factors such as financial market turmoil, the weaker dollar and a worsening outlook for the US economy.
"World oil demand is forecast to grow by 1.2 million barrels per day in 2008 to average 86.97 million bpd, unchanged from last month," the Organization of the Petroleum Exporting countries said in its April monthly report.
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