(Adds new record highs, updates prices)
By Randy Fabi
LONDON, April 15 (Reuters) - Oil set new record highs above
$113 a barrel on Tuesday as investors sought to hedge against a
battered dollar.
Britain's Prime Minister Gordon Brown called on oil
producers to take action to dampen prices ahead of talks with
U.S. President George W. Bush where Brown said they would
discuss collective action to bring prices down.
U.S. crude <CLc1> rose $1.80 to $113.56 a barrel at 1405
GMT, after touching a record high of $113.93.
Oil is up about 18 percent from the start of the year and is
averaging near $100.
London Brent crude <LCOc1> was up $1.91 at $111.75, after a
record high of $111.85. The May Brent futures contract expires
later on Tuesday.
"One thing that is clearly driving the oil price is that the
U.S. dollar has gotten substantially weaker in the past several
months and quarter," said Richard Batty of Standard Life.
"The volatility in asset markets -- mainly equities -- has
pushed investors towards commodities."
The dollar recouped some of its losses versus the euro
<EUR=> after U.S. Treasury data showed foreigners increased
purchases of U.S. assets in February.
The data eased some concerns that capital inflows into the
U.S. could dry up because of the credit crisis.
A weak dollar tends to raise prices for commodities
denominated in that currency by boosting non-U.S. spending power
and by attracting investors seeking an inflation hedge.
Dealers said oil's climb to new record highs has sparked a
fresh wave of buying.
Tetsu Emori, fund manager at Astmax Co Ltd said prices had
risen due to automatically placed buying orders once the
previous record had been breached.
He sees the next resistance target at $115.
SUPPLY DISRUPTIONS
British Prime Minister Gordon Brown urged oil producing
countries to act to counter high prices.
"The market needs to be adequately supplied and
oil-producing countries have their responsibility to respond to
higher oil prices," Brown will say, according to excerpts from a
speech he is due to give later on Tuesday.[]
Brown, who is due to travel to Washington on Wednesday for
talks with U.S. President George W. Bush, said he planned to
discuss collective action to bring down oil prices.
OPEC, which pumps more than a third of the world's oil, says
it is producing enough and that a U.S. economic slowdown may
weaken consumption in the second quarter.
"Current OPEC production at more than 32 million barrels per
day will be sufficient to both meet demand growth and contribute
to further stockbuilds," the Organization of the Petroleum
Exporting Countries said in its latest Monthly Oil Market
Report. []
OPEC has pointed to U.S. dollar weakness, speculative
inflows and political tensions as key factors driving prices
rather than a lack of oil.
U.S. gasoline futures hitting fresh highs on Monday also
helped prices. They rose as the United States gears up for the
summer driving season, when demand traditionally peaks.
U.S. crude oil inventory figures are due on Wednesday.
They likely rebounded last week after a surprise drawdown
the week before, with an increase in imports lifting supply,
according to a preliminary Reuters poll of eight industry
analysts. []
(Additional reporting by Jane Merriman in London and Annika
Breidthardt in Singapore; editing by James Jukwey)
