(Adds detail, updates prices, previous TOKYO)
By Santosh Menon
LONDON, May 9 (Reuters) - Oil raced to a new record high
above $125 a barrel on Friday, as a strong performance over the
last week and a surge in heating oil futures saw investment
funds trooping into the market.
Funds were keen to shift their money into the oil market
after seeing U.S. crude rise about 13 percent since the start of
the month, analysts say.
U.S. crude for June delivery <CLc1> rose $1.37 to $125.06 by
1025 GMT, after earlier hitting a record high of $125.12 a
barrel.
London Brent crude <LCOc1> rose $1.36 to $124.20 per barrel.
"Funds are pouring into the crude market as prices have been
performing extremely well," said Tatsuo Kageyama, analyst at
Kanetsu Asset Management in Tokyo.
"Lingering geopolitical fears and high heating oil prices
are helping the market, but the speed of the rise is too fast."
Gains in U.S. crude picked up momentum after distillate
stocks in the United States, including heating oil, fell.
The U.S. Energy Information Administration (EIA) said on
Wednesday domestic distillate stocks, which include heating oil
and diesel, fell 100,000 barrels last week, to 105.7 million
barrels, against forecasts for an 800,000-barrel rise. []
Gas oil futures <LGOc1>, the benchmark for European heating
oil and diesel contract, surged to a new record high amid
worries about tight global diesel supplies.
The rally in gas oil has outstripped Brent and its premium
over Brent is at a record high.
"I'm not particularly surprised by the speed of the rise in
crude. There are many market bulls hoping for prices to rise
heading into the summer," said Tetsu Emori, fund manager at
Astmax Co Ltd in Tokyo.
This is despite the recent recovery in the U.S. dollar,
which has had an inverse relationship with oil prices.
SPOTLIGHT ON OPEC
Oil's relentless rise has once again turned the spotlight on
Organization of the Petroleum Exporting Countries (OPEC), which
has for months resisted calls to pump more oil to tame prices.
On Friday, an OPEC source said the exporters' group may
consult on whether it needs to boost output before a scheduled
meeting in September should crude oil prices keep rising.
"If the price keeps going up, OPEC may consult on an
increase in production before it meets in September. In my view,
any increase would have to be more than 500,000 barrels per day
to have an impact on the price," the source told Reuters.
OPEC's Secretary-general Abdullah al-Badri said on Thursday
world oil markets have enough supply now, but OPEC was willing
to pump more if needed to keep pace with demand. []
OPEC exports, excluding from Angola and Ecuador, will rise
by 220,000 barrels per day (bpd) in the four weeks to May 24 on
Asian demand and a recovery in Nigerian supplies after a strike
that crippled output, said British consultancy Oil Movements.
Traders will be watching the release later on Friday of U.S.
international trade data for March (1230 GMT) and the Economic
Cycle Research Institute weekly index at (1430 GMT) for
potential price guidance.
(Additional reporting by Chikafumi Hodo in Tokyo; Editing by
James Jukwey)
