Oil soared to a record, over $58 a barrel yesterday, adding pressure on producer cartel OPEC to increase supplies, before profit-taking by speculators eased prices into negative territory.
US crude on the New York Mercantile Exchange peaked at $58.28 (€45.35) a barrel - the highest front-month oil futures price on record - before ending the day down 26 cents to $57.01 a barrel.
London's Brent crude slipped 28 cents to $56.23 a barrel.
Prices have surged 5 per cent since a forecast last week by Goldman Sachs investment bank that the price of oil could eventually spike above $100 as global demand growth strains supply capacity.
Organisation of the Petroleum Exporting Countries (Opec) president Sheikh Ahmad al-Fahd al-Sabah said yesterday that cartel oil ministers had begun telephone consultations on possibly increasing production by a further 500,000 barrels (bpd) per day to cool prices.
"If there is a decision it should be in the next two weeks. For that, if there will be any new production, it should be in May," said Sheikh Ahmad, also Kuwait's energy minister.
Opec raised output limits by 500,000 barrels per day (bpd) to 27.5 million bpd in mid-March and left room for a second rise before a June meeting if prices failed to ease below $55.
US Treasury Secretary John Snow described high energy prices as "extraordinarily unwelcome" and said that they will take a toll on the economy's generally positive performance.
"The American economy seems to be on a good path, but I do worry about energy," Snow told a tax executives' conference.
"We're not an economy geared to $60 (a barrel) oil."
In inflation-adjusted terms, oil prices remain well below the roughly $90-a-barrel peak hit in the 1980s, according to calculations by the International Energy Agency.
Nigerian presidential adviser on petroleum Edmund Daukoru said at the weekend a decision to increase Opec crude output could happen within two weeks if prices stayed above $55.
"They shrugged off the first one, but it will be more difficult for them to shrug off the second one," Mr Daukoru said, referring to the market reaction to Opec's output rise.
An Opec delegate said yesterday the group's 10 members -, under formal output limits with Iraq excluded - would pump 28.1 million bpd in April, which is about 400,000 bpd above estimated March production and 600,000 bpd higher than the current ceiling.
US oil prices have surged by more than 30 per cent this year, with big-money speculative funds buying heavily on signs that robust demand growth in Asia's emerging economies and the United States would put a strain on the world supply of crude oil.
Non-Opec producers are pumping at full tilt and have little spare capacity to offer the market. - (Reuters)
