(Recasts, previous SINGAPORE)
LONDON, April 16 (Reuters) - Oil struck a new record high
above $114 a barrel on Wednesday, buoyed by the weak U.S.
dollar, inflows of speculative money and long-term constraints
on supply.
U.S. crude <CLc1> was 53 cents higher at $114.32 a barrel by
0943 GMT, just below a fresh peak of $114.41. Today's price is
more than three times the average price of 2002, when oil's
rally began.
London Brent crude <LCOc1> for the new front-month of June
was up 54 cents at $112.12.
"The funds and technicians are in the driving seat," said
Christopher Bellew, of Bache Commodities Ltd.
"There has been growth in the level of speculative money
going into commodities markets."
The weak dollar -- together with strong demand -- has driven
oil and other commodities such as corn, gold and rice to record
highs in recent months, as investors and speculators have sought
a hedge against inflation.
"The dominant factor continues to be the U.S. dollar and I
expect this to continue for a while," said Gerard Rigby, an
analyst at Sydney-based Fuel First Consulting.
"Whenever you get any kind of good economic news out of the
(United States) at the moment, the dollar will rise and oil
falls, and the other way round, you get a new oil record," he
added.
The dollar headed towards a record low versus the euro on
Wednesday, hurt by caution ahead of quarterly earnings
announcements by major U.S. banks and worries about the turmoil
in credit markets.
CHINA DEMAND
Lifting some concerns over a supply squeeze, Mexico, a major
supplier to the U.S., reopened its three main Gulf of Mexico oil
ports as bad weather cleared, the government said. Only a
smaller Pacific port remained shut.
But in a sign that consuming countries were still concerned
about a supply shortfall, Britain's prime minister Gordon Brown
on Tuesday called on the Organization of the Petroleum Exporting
Countries to boost production to counter rapidly rising prices.
OPEC, which pumps more than a third of the world's oil,
insists it is supplying enough oil.
Demand in the world's top consumer may be losing steam. U.S.
crude oil imports fell in February to the lowest level in a
year.
They declined by 486,000 barrels per day (bpd), or 4.9
percent, from the month before to 9.514 million bpd, the federal
Energy Information Administration said.
But China's diesel imports rebounded in March to 490,000
tonnes, up some 49 percent from a month earlier, and remained
robust in April and May, as the government extended a tax break
on imported fuels.
China's economy grew 10.6 percent in first quarter, the
National Bureau of Statistics said, slower than the 11.2 percent
in the fourth quarter, but stronger than forecast of 10.0
percent, underscoring the resilience of the world's fourth
largest economy despite fierce winter weather and a global
credit crunch.
U.S. crude oil inventories likely rebounded last week, with
an increase in imports lifting supply, following a surprise
drawdown the week before, a Reuters poll of 14 analysts showed.
But gasoline stocks probably fell for the fifth week running.
(Additional reporting by Annika Breidthardt in Singapore;
editing by James Jukwey)
