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US oil strikes new record above $44

US light crude CLc1 struck $44.24 a barrel, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. It later fell to trade around $44. London's Brent crude LCOc1 followed suit, scoring $40.45 a barrel, a level not seen since the run-up to the first Gulf War when it hit an all-time high of $40.95.

"It's just up, up and away. There's no stopping it," said Edward Meir, an analyst at Man Energy, adding some traders believed US oil at $50 a barrel was no longer inconceivable.

Oil prices have surged by more than one-third since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption.

Opec President Purnomo Yusgiantoro said yesterday the group had no spare oil to hand to dampen 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 Saudi Arabia, the world's number one exporter.

Saudi Arabia has said it would produce 9.5 million barrels per day (bpd) in August, which would be just one million bpd below the country's full capacity. Purnomo's comments echoed those on Monday of Algerian Oil Minister Chakib Khelil, who said Opec had done all it could to stop this year's oil price rally. "Opec can do nothing," Khelil told reporters in Algiers.

The Russian Tax Ministry has begun an investigation into the 2002 accounts of the country's largest oil firm Yukos, the company said on Monday, the latest twist in its battle against bankruptcy.

Bailiffs have given Yukos one month to pay back taxes. 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.

Yukos, which pumps one fifth of Russian oil, 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.

"If anything like that did happen, oil prices could move up three or four dollars quite easily," Man Energy's Meir said. 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. Eight analysts surveyed by Reuters predicted the EIA would show a 300,000 barrel dip in crude stocks in the week to July 30 and a 600,000 barrel fall in gasoline inventories. Distillate stocks, including key winter heating oil, were seen rising by 1.4 million barrels.