Opec unable to help cool market as oil hits record $44

OIL PRICES broke through the $44 a barrel barrier to hit a new all-time record yesterday after Opec, the producers' cartel, said there was little it could do to cool the market.

OIL PRICES broke through the $44 a barrel barrier to hit a new all-time record yesterday after Opec, the producers' cartel, said there was little it could do to cool the market.

US light crude struck $44.24 a barrel, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. It later ended at $44.15, up 33 cents. London's Brent crude followed suit, ending up 67 cents at $40.67 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.

Purnomo Yusgiantoro, Opec's president, said the cartel had no spare oil to hand to dampen prices. "The oil price is very high, it's crazy. There is no additional supply," he said in Jakarta.

The latest surge is likely to lead to fresh price rises at the petrol pump and UK transport organisations warned that motorists should expect to pay 80p a litre for the "foreseeable future". The rise will increase pressure on Gordon Brown, the Chancellor, to delay an inflation-linked 1.5p a litre rise in fuel duty in this winter's pre-Budget report (PBR).

Ray Holloway, the director of the Petrol Retailers' Association, said service stations had already added 1p to the price of fuel in the wake of the recent spike. "I think we have to learn to live with a barrel price somewhere in the mid-thirties and at times of pressure it will go towards $40," he said.

He forecast that diesel prices - which affect the politically volatile haulage and farming industries - could rise by a further 2p a litre over the summer.

He said the Chancellor, who defused mounting concern among hauliers last month by delaying a planned duty rise for December until the PBR, would postpone it again until next spring's Budget. Oil prices have surged by more than a third since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption. The price has been driven by speculative buying triggered by growing fears of attacks on oil supplies in the Middle East and turmoil at Yukos, the Russian oil major. Mr Holloway said up to $3 a barrel was due to speculators.

Oil traders fear strong demand is preventing global stocks from building up ahead of peak winter demand.

The US Energy Information Administration will release its weekly oil stocks report today. It is expected to show declines in national crude and gasoline inventories, although distillate tanks are forecast to rise.