Oil prices are nearing an all time record after supply concerns on Tuesday lifted them above 78 US dollars a barrel, almost the 78.40 reached in the aftermath of the Lebanon conflict in July 2006.
Prices have been rising for weeks after disruptions to Nigerian and North Sea output and concerns that demand will outstrip supply by the end of 2007. Light, sweet crude rose to 78.18 US dollars, up 1.8%, while Brent crude rose 1.34 to 77.08 US dollars in London. Markets analysts believe new record prices could be reached Wednesday when the US Department of Energy is expected to reveal the latest inventories. Last week oil stocks in the US kept falling as demand from refineries continued to rise and forecasts are that they could have fallen by 0.7 million, their fourth consecutive decline. Looking into the future there are fears that OPEC may be reluctant to lift production which could lead to a sharp pre-winter decline in supplies. OPEC, which meets again on September 11 to discuss pre-winter policy, has said it sees no need to unwind the two production cuts it agreed in late 2006 as long as inventories are high
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