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Last Updated: Thursday, 17 March, 2005, 22:35 GMT
Oil prices surge to fresh highs
Opec President Sheikh Ahmad Fahd al-Sabah at the cartel's meeting in Iran
Opec is promising to review its output limits again
Crude oil prices set new records on Thursday despite a commitment to boost output quotas from the Opec oil producers' cartel a day earlier.

News that US petrol and fuel oil stocks were more deeply depleted than expected overshadowed Opec's offer.

Brent crude topped $55 a barrel for the first time, moving from $55.53 in early London trade to hit a record $56.15 a barrel in afternoon dealing.

In the US, crude oil futures touched a record of $57.60 before slipping back.

At Wednesday's close in New York, US light crude had finished at $56.46 a barrel after the US Energy Information Administration reported petrol stocks were nearly three million barrels below previous week's levels.

It overtook a previous record high of $55.17 a barrel set last October.

In London, Brent crude had closed at $54.80 a barrel after rising 95 cents on the day to beat a previous high of $54.30 set on 9 March.

Opec pledge

Opec's president said on Thursday that if prices continued to rise the cartel may hold talks next week to consider pumping even more, bringing forward discussions that were previously due to begin only in April.

I think the market is preoccupied with projections of rising demand growth
Marshall Steeves, Refco

"If prices continue as they are now, then starting from next week we will start our discussions," Reuters quoted Opec president, Sheikh Ahmad al-Fahd al-Sabah, as saying.

On Wednesday, Opec lifted its production ceiling by 500,000 barrels a day with immediate effect.

But with Opec member states already pumping above their new daily output ceiling of 27.5 million barrels, analysts viewed the immediate increase as a formal move rather than one which could make much of a dent in either supply or prices.

Markets 'preoccupied'

The US government's Energy Information Administration weekly data revealed crude stocks had risen for a fifth week in a row.

But the markets were unsettled by figures showing larger-than-forecast drops in levels of petrol and distillate fuels, which include heating oil and diesel.

The International Energy Agency has forecast demand for crude oil will grow even faster than expected this year as demand in the US and China remains strong.

"I think the market is preoccupied with projections of rising demand growth this year and the possibility that demand growth will rise at a higher pace than supply growth," Marshall Steeves, analysts at Refco told Reuters.

While oil prices are 50% higher than a year ago, they would need to rise above $90 a barrel in order to surpass the all-time 1980 record in inflation-adjusted terms.

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