Page last updated at 23:08 GMT, Thursday, 17 April 2008 00:08 UK

Oil hovers near $115 record high

Oil traders on the floor of the New York Mercantile Exchange
The weakening US dollar is having a big effect on oil prices

Oil prices are hovering close to $115 a barrel, having crossed the record mark on Thursday after a US inventory report raised concerns about supplies.

US light, sweet crude oil pulled back slightly to $114.86 in New York from the previous day's $115.21 high.

Brent crude hit an all-time peak of $113.38 before falling back to $112.43.

The weak dollar has helped to draw investors towards commodities, which are cheaper for foreign buyers because they are priced in the US currency.

Nigerian concerns

US crude stocks fell 2.3 million barrels in the week to 11 April and petrol stocks fell by more five million barrels, the US Energy Information Administration reported.

This raised concerns about the amount of gasoline available ahead of the fuel-intensive summer driving season in the US.

Until the dollar really stabilizes, financial investors will continue to prop up prices
Victor Shum, Purvin and Gurtz

But analysts said it was the dollar's continued weakness which was really supporting prices.

"The market is driven by investors piling money into oil because of the weakening dollar," said Victor Shum, from energy consultants Purvin and Gurtz.

"Until the dollar really stabilises, financial investors will continue to prop up prices."

Producers' body Opec insists there is more than enough oil in the market and that prices are being forced up by broader economic worries, not specific supply concerns.

But recent supply interruptions in North America and Nigeria acted to push prices higher earlier this week.

Further warnings have been sounded about global oil supplies with the Financial Times reporting that advisers to the Nigerian President believe that its current oil and gas output could fall by 30% by 2015.

A lack of investment in energy infrastructure posed a "grave danger to the continued wellbeing of the industry," the report, prepared for President Umaru Yar'Adua, concluded.

Uncertainty about the outlook for Africa's largest oil producer follows recent comments by one of Russia's largest oil producers that output there may have peaked.

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