(Recasts throughout, previous SINGAPORE)
LONDON, Feb 29 (Reuters) - Oil eased towards $102 a barrel
on Friday, stepping back from its new record peak above $103 hit
in a rally fuelled by fund money chasing commodities as the U.S.
dollar plummets and worries mount about supply disruptions.
U.S. crude oil <CLc1> was 40 cents down at $102.19 a barrel
by 0945 GMT after it hit a new record of peak of $103.05 earlier
in the session, smashing the inflation-adjusted high of $102.53
reached in 1980, a year after the Iranian revolution.
London Brent crude <LCOc1> dropped 54 cents to $100.36 a
barrel, off its record highs of $101.27.
"Oil prices have risen more than 15 percent in the last 3
weeks, so some profit taking could lead to lower prices today,"
said Frank Schallenberger, analyst at Landesbank
Baden-Wurttemberg in Stuttgart, Germany.
Oil's latest spike came as Ecuador shut a key oil export
pipeline and a fire hit a major European natural gas plant.
The Trans-Ecuadorean pipeline, which pumps most of the oil
extracted by Petroecuador in the Amazon forest to ports on the
Pacific Ocean, was shut after a landslide punctured it.
State oil firm Petroecuador initially said it would declare
force majeure on shipments from the pipeline, but shortly
thereafter reversed the decision, saying it would bypass the
damage or use a private pipeline. []
Oil surged late Thursday after a fire at the Bacton Gas
Shell <RDSa.L> terminal in Norfolk, England, shut more than 45
million cubic metres per day of gas supplies, about 13 percent
of the UK national grid's forecast demand.
Shell said the fire had been extinguished and the plant had
been shut down safely. It remained shut on Friday.
PRESSURE ON OPEC TO RAISE OUTPUT
Oil's relentless rally comes ahead of a meeting of OPEC
ministers in Vienna next week, where most members say they are
unlikely to raise production due to hefty global crude and fuel
stocks ahead of the second quarter.
U.S. Energy Secretary Sam Bodman on Thursday repeated calls
for OPEC to raise production as consumers grapple with rising
oil costs, the mortgage crisis and the credit crunch.
[]
But Venezuelan Oil Minister Rafael Ramirez said there was no
need for OPEC to increase production. The head of Libya's OPEC
delegation Shokri Ghanem said earlier that the exporter group
most likely will leave output steady.
Some analysts say the plunging U.S. dollar, which tumbled to
new all-time lows on Friday, and rising inflation concerns have
triggered a wave of fund money into commodities, many of which
are constantly testing new record highs.
Prices of dollar-denominated commodities tend to rise when
the currency weakens.
"Whilst various reasons will be offered for the rally,
reality will tell us that this market is in overdrive and a
major contributor is fund/speculative money," said Robert
Laughlin at MF Global.
(Additional reporting by Luke Pachymuthu in Singapore, editing
by James Jukweyx)
