April 16, 2008	Wednesday	Rabi-us-Sani 9, 1429

LONDON, April 15: The price of New York oil surged to a new record high $113.93 a barrel on Tuesday, boosted by a weak US currency and tight energy supplies after Opec held its demand forecast, traders said.

Later on Tuesday, New York’s main oil contract, light sweet crude for delivery in May, stood at $113.81 a barrel, up $2.05 from Monday’s finish.

London’s Brent North Sea crude for May struck its own record high of $112.08 a barrel on Tuesday. The contract, which expires at the close, later stood at $111.70, up $1.86.

“The main reason for the rally is the dollar... but we also have some problems with supply,” said CMC Markets trader Nas Nijjar.

“The market is really reacting to the fundamentals of supply and demand”.

He added: “People are talking about (lower US consumption), but there is still strong demand coming out of India and

China.”

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 industrialised countries, appetite for crude would remain robust elsewhere.

The cartel, which pumps 40 per cent of global crude supplies, 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 Organisation of Petroleum Exporting countries said in its April monthly report.

The slowing world economy and mild winter in some industrialised members of the Organisation for Economic Cooperation and Development were the main reasons behind weak demand, Opec argued.

Oil prices also remained well supported on Tuesday by the weakening US currency, which encourages demand for dollar-priced crude because it becomes more affordable for foreign buyers.

“Overall, crude prices remain well in the short run with the persistent weakness in the dollar, strong fund interest, various supply disruptions and strong demand for distillate fuels from Asia and Europe,” said Sucden analyst Andrey Kryuchenkov.

Meanwhile, US energy stockpiles showed an unexpectedly sharp decline in the week ending April 4. —AFP