The price of New York crude oil surged Tuesday to a new record high of $113.93 a barrel, boosted by a weak US currency and tightening energy supplies, traders said. Market participants also digested news that the crude-producing cartel OPEC left unchanged its 2008 estimate of growth in world oil demand. Later Tuesday, New York's main oil contract, light sweet crude for delivery in May, stood at $113.47 a barrel, up $1.71 from Monday's finish. London's Brent North Sea crude for May struck its own record high of $112.08 a barrel on Tuesday. The contract, which expires at the close, later stood at $111.58, up $1.74 . “The main reason for the rally is the dollar... but we also have some problems with supply,” said CMC Markets trader Nas Nijjar. “The market is really reacting to the fundamentals” of supply and demand. He added: “People are talking about (lower US consumption), but there is still strong demand coming out of India and China.” Organization of Petroleum Exporting Countries (OPEC) on Tuesday left unchanged its 2008 estimate of growth in world oil demand, arguing that while high prices and slowing economies would brake demand in major industrialised countries, appetite for crude would remain robust elsewhere. OPEC, which pumps 40 percent of global crude supplies, added that soaring prices reflected high volatility in the market. However, it said that such volatility was primarily due to “non-fundamental” factors such as financial market turmoil, the weaker dollar and a worsening outlook for the US economy. “World oil demand is forecast to grow by 1.2 million barrels per day in 2008 to average 86.97 million bpd, unchanged from last month,” OPEC said in its April monthly report. The slowing world economy and mild winter in some industrialized members of the Organization for Economic Coooperation and Development were the main reasons behind weak demand, OPEC argued. Oil prices also remained well supported on Tuesday by the weakening US currency, which encourages demand for dollar-priced crude because it becomes more affordable for foreign buyers. “Overall, crude prices remain well in the short run with the persistent weakness in the dollar, strong fund interest, various supply disruptions and strong demand for distillate fuels from Asia and Europe,” said Sucden analyst Andrey Kryuchenkov. Meanwhile, US energy stockpiles showed an unexpectedly sharp decline in the week ending April 4, according to the last report from the US Department of Energy. The DoE was to publish its next inventories release on Wednesday. Oil prices had fallen early on Monday owing to expectations of a drop in worldwide crude demand after Group of Seven finance chiefs expressed deep concern over the US economy at a weekend meeting. Britain's Prime Minister Gordon Brown on Tuesday called on OPEC members to boost production to counter rapidly rising oil prices, which have shot up 80 percent since a year ago, adding his voice to similar requests from the administration of US President George W. Bush. “We are not producing enough oil ... and we can take collective action to persuade OPEC and others to get the oil price down,” Brown said in an interview on Sky Television. Commodities have rallied in recent months due to record weakness in the US dollar. A weak dollar tends to raise prices for commodities denominated in that currency. __
