US oil prices hovered close to record levels just below $44 a barrel on Tuesday as the head of the Opec producers' cartel said there was little the group could do to cool the red-hot market for the time being.
US light crude rose 11 cents to $43.93 a barrel, only 1 cent off the record touched on Monday at $43.94, which marked the highest level since crude futures were launched on the New York Mercantile Exchange in 1983.
London's Brent crude climbed 21 cents to $40.18 a barrel. Opec President Purnomo Yusgiantoro said on Tuesday the producers' cartel had no extra oil to immediately supply the world market to bring down prices.
"The oil price is very high, it's crazy. There is no additional supply," Purnomo told reporters in Jakarta. "Minister Naimi has said Saudi Arabia can increase production but they cannot do it immediately," he said referring to Ali al-Naimi, oil minister for the biggest exporter Saudi Arabia.
Purnomo's comments echoed those on Monday of Algerian Oil Minister Cahokia Khelil, who said the Organisation of the Petroleum Exporting Countries had done all it could to stop this year's oil price rally.
"Opec can do nothing," Khelil told reporters in Algiers. US oil has surged more than $14, or 49 percent, since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption.
"Stronger-than-expected demand has eaten into world spare capacity, which has been eaten into further by problems in Iraq. Now there is the uncertainty of YUKOS," said David Thurtell, commodities strategist at Commonwealth Bank of Australia.
"There's been a lot of bullish news factored into the market, which is pretty much priced for the worst-case scenario."
Bailiffs have given Russia's largest oil company, YUKOS, one month to pay back taxes, but the company said on Monday that the Tax Ministry had begun an investigation into its 2002 accounts.
YUKOS owes almost $7 billion in back taxes for 2000 and 2001 and analysts have said any bills for later years could bring the total towards $10 billion.
It pumps one-fifth of production in Russia, the No 2 supplier after Saudi Arabia, but has had its bank accounts and assets frozen, raising fears that its sales may dry up at a time when global production is running close to full tilt.
Some industry estimates indicate that Opec, which accounts for about 40 percent of supply, is pumping close to 30 million barrels per day (bpd) of crude for the first time since 1979.
The group, which raised its official production limits to 26 million bpd on August 1, has been producing way over its self-imposed ceiling to try and dampen soaring prices.
The official limits exclude Iraq, where exports are expected to reach between 1.7 and 1.8 million-bpd this month as operations recover from a series of sabotage attacks this year. Oil traders are nervous that strong demand is preventing global stocks from building ahead of peak winter demand.
The US Energy Information Administration (EIA) will release its weekly oil stocks report on Wednesday, which is expected to show declines in national crude and gasoline inventories although distillate tanks are forecast to rise.
The weekly report is closely monitored as a barometer for demand in the world's biggest oil consumer.