NEW YORK - Oil soared to a record over US$58 a barrel on Monday, adding pressure on producer cartel Opec to hike supplies, before profit-taking by speculators eased prices into negative territory.
US crude on the New York Mercantile Exchange peaked at US$58.28 a barrel -- the highest front-month oil
futures price on record -- before ending the day down 26 cents to US$57.01 a barrel. London's Brent crude slipped 28 cents to US$56.23 a barrel.
Prices have surged 5 per cent since a forecast last week by Goldman Sachs bank that oil could eventually spike above US$100 as global demand growth strains supply capacity.
Opec President Sheikh Ahmad al-Fahd al-Sabah said on Monday cartel oil ministers had begun telephone consultations on possibly increasing production by a further 500,000 barrels 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.
The Organisation of the Petroleum Exporting Countries raised output limits by 500,000 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 US$55.
US Treasury Secretary John Snow on Monday 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 US$60 (a barrel) oil. "
In inflation-adjusted terms, oil prices remain well-below the roughly US$90-a-barrel peak hit in the 1980s, according to calculations by the International Energy Agency.
Nigerian Presidential Adviser on Petroleum Edmund Daukoru said on Sunday a decision to increase Opec crude output could happen within two weeks if prices stayed above US$55.
"They shrugged off the first one but it will be more difficult for them to shrug off the second one," Daukoru said, referring to the market reaction to Opec's output rise.
An Opec delegate said on Monday the group's 10 members under formal output limits, excluding Iraq, 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 strain world supply.
Non-Opec producers are pumping at full tilt and have little spare capacity to offer the market.
While spare production capacity shrinks, full-pace output in producer nations has translated into swelling stockpiles of crude oil and other fuels in the United States.
US crude oil supplies are running near a three-year high and analysts are expecting another increase to be shown in the next batch of government inventory data this week.
US petrol supplies are also running at a surplus, but strong demand and recent refinery problems have raised concerns about the adequacy of inventories ahead of the peak summer demand season.
US petrol futures struck an all-time high on Monday of US$1.7491 a gallon, later easing to US$1.7200, 1.10 cents lower on the day.
- REUTERS
<EM>Oil</EM>: Price slips after hitting record, Opec mulls hike
NEW YORK - Oil soared to a record over US$58 a barrel on Monday, adding pressure on producer cartel Opec to hike supplies, before profit-taking by speculators eased prices into negative territory.
US crude on the New York Mercantile Exchange peaked at US$58.28 a barrel -- the highest front-month oil
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