Oil prices push closer to all-time highs

NEW YORK (AFP) - Crude oil futures raced closer to all-time record highs yesterday as speculative buying picked up amid tight US fuel supplies, analysts said.

New York's main oil futures contract, light sweet crude for delivery in August, climbed 1.43 dollars to close at 73.93 dollars a barrel, and briefly topped 74 dollars for the first time since August 11, 2006.

The market action came exactly one year after New York crude hit its all-time high of 78.40 dollars a barrel.

In London, Brent North Sea crude for August delivery leapt 1.17 dollars to settle at 77.57 dollars -- the highest point since August 10, 2006 and about one dollar away from the record of 78.64 hit three days earlier.

"The speculative assault on crude remains very impressive," said Petromatrix analyst Olivier Jakob.

Prices were also lifted by news that the International Energy Agency has lifted its 2008 forecast for oil product demand by 2.5 percent to 88.2 million barrels a day.

Eric Wittenauer at AG Edwards said that even though 2007 demand was revised down slightly by the IEA after methodological revisions "2008 demand estimates suggest growth of 2.5 percent, which is very robust."

Prices over the week have risen over one dollar a barrel in New York and two dollars in London.

"We have been endlessly cataloguing the supportive influences all week: a strong Brent, North Sea production problems, a decline in August loadings, a weaker dollar and OPEC keeping the global supply outlook tight," said Mike Fitzpatrick at Man Financial.

"Additionally, a push to a new record high in the stock market gives a bullish macroeconomic outlook that points to strong energy demand ahead, and endorsed by the latest IEA report.

"Throw rising political risks into the mix, which yesterday's vote in the (US) House to pull troops out of Iraq by April 1, and the drafting of a third round of sanctions against Iran clearly are, and it becomes increasingly difficult to parse a scenario that has oil prices falling."

It also emerged Wednesday that US gasoline or petrol reserves had climbed by 1.2 million barrels to 205.6 million in the week ending July 6. That beat analysts' forecasts of a gain of 825,000 barrels.

But gasoline stocks were 3.8 percent lower than at the same stage last year.

Traders also assessed the latest monthly oil market report from the International Energy Agency (IEA).

The IEA predicted Friday that tightness on the global oil market would ease next year, forecasting that supplies would exceed robust demand.

"Overall, both in terms of spare upstream capacity and refinery flexibility, 2008 looks at this stage to be slightly more comfortable than 2006 and 2007," the IEA said.

The IEA suggested again that the OPEC producers' cartel should pump more crude, notably during the ongoing US summer driving season when many Americans take to the highways for their holidays.

Earlier this week Abdullah al-Badri, secretary general of the Organization of Petroleum Exporting Countries, said OPEC did not plan to raise its oil output to ease the pressure on crude prices.

Analysts noted that recent gains in Brent prices followed the closure of a number of North Sea oilfields for maintenance and because of a pipeline problem.