LONDON, Nov 20: World oil prices rose strongly on Tuesday, nearing $96 a barrel on lingering supply concerns and as the US unit tumbled against major rivals, traders said.

New York’s main contract, light sweet crude for January delivery, climbed 97 cents to $95.61 per barrel.

In London, Brent North Sea crude for January delivery rallied 98 cents to $93.26 per barrel.

“Oil prices were higher on Tuesday, with the dollar reaching fresh record lows against the euro and still coming off against other major currencies,” Sucden analyst Michael Davies said.

A weak US unit makes dollar-denominated commodities cheaper for buyers using stronger currencies.

Meanwhile the market on Tuesday continued to focus on the state of energy supplies.

“Oil markets remain tight,” analysts from the Commonwealth Bank of Australia said.

Despite supplies being strained ahead of the northern hemisphere winter, Opec decided not to increase its production following a meeting in Riyadh over the weekend.

The Organisation of the Petroleum Exporting Countries (Opec) has been under pressure, in particular from the United States, the world’s biggest energy user, to increase supply to help cool prices.

However, Opec’s final declaration on Sunday after the meeting urged world peace to help stabilise prices and included a commitment to help fight global warming.

Opec, which pumps 40 per cent of global crude supplies, last decided to raise output in September when the oil producers’ cartel agreed to provide an extra 500,000 barrels a day to the market, effective from November 1.

Some traders believe the ongoing weakness in the dollar will prompt Opec to seek higher prices for oil, if not to move away from the currency all together as its earnings erode.

“(Opec) producers have seen their purchasing power decline with the dip in value of the greenback,” said Bank of Ireland analyst Paul Harris.

The cartel decided against hiking oil output even though crude futures recently struck record heights close to $100 a barrel.

Opec said it would hold off any discussion regarding production until its next meeting in December.

“The apparent removal of the possibility of increased supply will serve to at least underpin crude oil at these (price) levels,” Harris said.--AFP