(Recast, updates prices)
By Bate Felix
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.
Its next direction could be dictated by weekly statistics
from the U.S. Energy Information Administration (EIA) due later
in the day, which are expected to show a drop in distillate
inventories, including diesel and heating fuels, for the 10th
consecutive week last week.
U.S. crude <CLc1> was 19 cents higher at $113.99 a barrel by
1210 GMT, just below a fresh peak of $114.53. 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 nine cents at $111.67.
New York heating oil futures and London's ICE gas oil
futures, benchmarks for distillate fuels in the United States
and Europe, were leading the oil complex. <OILOIL>
The ICE gas oil futures have remained above $1,000 a tonne
for most of the time since early April.
"The extra is predominantly linked to localised demand
strength in distillates," said Harry Tchilinguirian of BNP
Paribas. "All you have to do is look at the price of gas oil, it
cost $1,000 a tonne, that's unheard of."
Analysts expect the government data would show a 1.6 million
barrel drop in U.S. distillate inventories for last week, while
crude oil stocks may have risen by 1.5 million barrels. []
Distillates inventories in Europe were also lower than a
year earlier levels. []
WEAK DOLLAR
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.
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.
Iran's oil minister on Wednesday questioned the need for
OPEC to hike production to cool surging oil prices, snubbing
calls for more crude from its Western foes, the United States
and Britain. []
(Additional reporting by Annika Breidthardt in Singapore;
editing by James Jukwey)
