(Updates prices, adds comment)
LONDON, March 7 (Reuters) - Oil hovered around $105 a barrel
on Friday, remaining within sight of its record high from the
previous session, with a tumbling U.S. dollar, fund flows and
OPEC's reluctance to pump extra crude providing support.
U.S. light crude for April delivery <CLc1> was down 40 cents
to $105.07 a barrel by 1220 GMT. It hit a new record high of
$105.97 on Thursday.
London Brent crude <LCOc1> hit a new record high on $103 but
then eased back to $102.46, down 15 cents.
"We saw pretty wild days mid-week but now there's no
glaringly obvious news to move the market...There are no extreme
moves in dollar or stock markets," said Tony Machacek of Bache
Commodities.
The dollar slid further on Friday to new record lows against
the euro and the Swiss franc.
Oil prices jumped this week after a surprise fall in crude
stocks in top oil consumer the United States and after OPEC
decided against changing output policy at its meeting in Vienna
despite consumers' calls to pump more oil.
The oil exporters group, which pumps more than a third of
the world's oil, has long argued high oil prices do not reflect
oil market fundamentals and are being driven by speculation.
Influential Saudi Oil Minister Ali al-Naimi reiterated the
assertion in remarks published on Friday, saying speculation was
behind triple-digit oil and made it impossible for any
organisation to control price movements.
"Today there is no link between oil (market) fundamentals
and prices," he told Moroccan newspaper Asharq al-Awast.
"The duty of oil exporters is to make sure that fundamentals
are healthy," said Naimi. "If these fundamentals were stable and
fulfil market needs, then there is no need to raise or decrease
production," he added.
OPEC's argument that there is enough oil has been backed by
steadily rising crude inventories in the United States, but a
U.S. government report released after the group's meeting on
Wednesday showed crude stocks fell by 3.1 million barrels last
week, against analysts' forecasts for an increase. []
OPEC will next meet in September, although ministers could
confer informally at a conference between consumers and
producers in Rome on April 20-22.
"Leaving things so open ended gives me and others a clear
impression that the cartel is prepared to let prices run away
for the time being. Perhaps they feel the weakness in the dollar
would offset any rise in price," said Rob Laughlin at MF Global.
A steady decline in the U.S. dollar, which again fell to
fresh record lows against the euro on Friday, has been a factor
pushing prices higher along with fund flows into commodity
markets as investors seek a hedge against inflation.
Tensions between OPEC member Venezuela, a top oil exporter
to the U.S., and neighbour Colombia, have also underpinned oil
prices.
Venezuela deployed forces toward the Colombian border on
Wednesday, after Colombia last weekend launched a raid against
rebels inside OPEC member Ecuador.
(Reporting by Margaret Orgill and Santosh Menon; editing by
James Jukwey)
