Oil prices surged more than 4 percent on Tuesday to hit a record over $100 a barrel on expectations Opec will keep production levels steady when it meets next month. News Nigerian oil delta rebel leader Henry Okah had died raised worries about supplies from the Opec country, but a spokesman for the government later said he was alive and in custody.
US crude settled up $4.51 at $100.01 a barrel after hitting $100.10 a barrel, a penny higher than the previous high struck on January 3. London Brent crude settled up $3.65 at $98.56 a barrel.
"Certainly Opec is one of the supportive factors in the market as it has said it will not boost output at its meeting next month," said Eric Wittenauer, analyst at AG Edwards in St. Louis. "News that Nigerian rebels said their leader Henry Okah was shot dead helped give traders a reason for bidding the market up in the afternoon."
Worries about the economic health of the United States, the world's top oil consumer, pushed oil off its record peak, but signs that Opec will hold maintain or even cut output when it meets on March 5 sent prices back to triple digits. "Production is not going to increase. It will either decrease or be stable," Opec President Chakib Khelil told Reuters on Monday. Venezuela's oil minister then echoed Khelil's opinion on Tuesday.
Other cartel officials said it would be hard to justify a reduction in supplies at current price levels. "We know that it is not all fundamentals, but whenever the price is like this, it is difficult to cut," said Shokri Ghanem, chairman of Libya's National Oil Corp.
Further price support came from US refinery problems and tensions between US oil giant Exxon Mobil and Venezuela over the take-over of an oil project last year. A fire on Monday shut Alon USA Energy's 67,000 barrel per day refinery in Big Spring, Texas, and officials said they were expecting to partially restart the plant in about two months.
The outage, as well as seasonal refinery maintenance, helped send US RBOB gasoline and heating oil futures to record highs as well. Crude prices began to rally last week when Venezuela cut exports to Exxon Mobil after the US company won court rulings to freeze $12 billion in the Opec nation's assets as part of an arbitration battle.
Venezuelan President Hugo Chavez said on Sunday the state could sue Exxon for unpaid oil taxes and repeated threats to cut oil sales to the United States. A move by LUKOIL to cut supplies to German refineries over a pricing dispute also put markets on edge.
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