Oil hits record over $100 on OPEC supply concerns
NEW YORK (Reuters) - Oil surged nearly 5 percent on Tuesday to hit a record over $100 a barrel on expectations OPEC will not hike output to ease high prices next month despite the economic woes of top consumer the United States.
U.S. crude settled up $4.51 at $100.01 a barrel after hitting $100.10 a barrel, a penny higher than the previous high struck on January 3. London Brent crude settled up $3.65 at $98.56 a barrel.
News Nigerian oil delta rebel leader Henry Okah had died raised worries about supplies from the OPEC country, but a spokesman for the government later said he was alive and in custody.
"Certainly OPEC is one of the supportive factors in the market as it has said it will not boost output at its meeting next month," said Eric Wittenauer, analyst at AG Edwards.
"News that Nigerian rebels said their leader Henry Okah was shot dead helped give traders a reason for bidding the market up in the afternoon."
Worries about the economic health of the United States pushed oil off its record peak, but signs that OPEC will hold or even cut output when it meets on March 5 sent prices back to triple digits.
"OPEC should maintain production or cut production," said Venezuela Oil Minister Rafael Ramirez, echoing comments made by OPEC President Chakib Khelil on Monday.
Other cartel officials said it would be hard to justify a reduction in supplies at current price levels, despite expectations demand will dip seasonally as the Northern Hemisphere winter comes to an end.
A rush of speculative investment in oil and other commodities helped push up prices in the asset class, traders said.
Further price support came from U.S. refinery problems and tensions between U.S. oil giant Exxon Mobil (XOM.N) and Venezuela over the takeover of an oil project last year.
A fire on Monday shut Alon USA Energy's 67,000 barrel per day refinery in Big Spring, Texas, and officials said they were expecting to partially restart the plant in about two months.
The outage, as well as seasonal refinery maintenance, helped send U.S. RBOB gasoline and heating oil futures to record highs as well.
Crude prices began to rally last week when Venezuela cut exports to Exxon Mobil after the U.S. company won court rulings to freeze $12 billion of the OPEC nation's assets as part of an arbitration battle.
Venezuelan President Hugo Chavez said on Sunday the state could sue Exxon for unpaid oil taxes and repeated threats to cut oil sales to the United States.
A move by LUKOIL to cut supplies to German refineries over a pricing dispute also put markets on edge.
A Reuters poll of analysts forecast U.S. government data due out on Thursday would show a 2.3 million barrel build in U.S. crude stocks, a 2 million barrel draw in distillate inventories, and a 600,000 barrel rise in gasoline stocks.
(Additional reporting by Gene Ramos in New York, Ikuko Kao in London, Chua Baizhen in Singapore; editing by Jim Marshall)
