(Updates prices, adds comment)
By Margaret Orgill
LONDON, March 7 (Reuters) - Oil prices hit a new record high
on Friday as a weak dollar outweighed concerns of a recession in
the United States that had been triggered by an unexpected drop
in U.S. jobs data earlier in the day.
U.S. light crude for April delivery <CLc1> rose $1.02 to an
all-time high of $106.49 a barrel. It then eased to stand at
$106.26 at 1639 GMT.
London Brent crude <LCOc1> was up $1 at $103.61.
News of the jobs data had led to a fall of more than $1 in
crude but analysts said the oil market had recently shrugged off
bearish U.S. economic data, seeing it leading to interest rate
cuts and weakness in the dollar, which in turn has led to higher
oil prices.
"The logic of the last few weeks has been to ignore U.S.
fundamentals," said Mike Wittner, global head of oil research at
Societe Generale.
The dollar slid to new record lows on Friday against the
euro <EUR=> and the Swiss franc.
A steady decline in the U.S. dollar has been a factor
pushing prices higher, along with fund flows into commodity
markets, as investors seek a hedge against inflation.
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
view 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.
U.S. INVENTORIES
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.
Tensions between OPEC member Venezuela, a top oil exporter
to the United States, 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
Anthony Barker)
