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SYDNEY - Oil extended gains yesterday, nearing US$95 ($125.40) a barrel as the dollar fell and some Opec members pushed for action to stem their declining purchasing power.
US light crude for January delivery rose US71c to US$94.55 a barrel adding to Friday's nearly 2 per cent gains that were partly fuelled by forecasts for colder US weather that would boost demand.
London Brent crude rose US67c to US$92.29 a barrel.
The Opec heads of state summit in Riyadh ended without signalling whether the producer group would agree to pump more oil at its December 5 policy meeting, although members renewed their pledge to provide "adequate" supplies to consumers.
Of greater interest to oil traders was the push by Iran and Venezuela - anti-US firebrands and typically Opec's most hawkish members - to press for some kind of action that would offset the declining value of their dollar-denominated oil revenues, such as pricing oil against a basket of currencies.
Iran's President, Mahmoud Ahmadinejad, was quoted as saying that the market price of fossil energy, including oil, was still below its real price.
Traders say the growing concern over the US currency could prompt Opec to seek a higher price.
"Opec talk about prices being undervalued and its concerns with the falling dollar are all filtering into the market," said Mark Pervan, a senior resources analyst at ANZ Bank in Melbourne.
The dollar fell again against the euro yesterday after weak US economic reports late last week that showed the biggest drop in industrial production since January.
Venezuelan President Hugo Chavez told the Opec summit that crude oil prices could double to US$200 a barrel if the US attacked major oil exporter Iran.
But Iran's Ahmadinejad said on Sunday his country would not use oil as a weapon even if it was attacked by the US over its disputed nuclear programme.
- Reuters
