Oil back above $96 after respite

Disruption to North Sea supplies has sent prices upwardsOil prices have rebounded above $96 in Asian trading as concerns about global supplies linger.

A barrel of US light crude was worth $96.46, up $1, having fallen to $95.46 on Thursday on pessimistic comments by Federal Reserve boss Ben Bernanke.

His forecast for slower economic growth may have meant weaker demand as firms reined in spending, analysts said.
But disruption to oil output in the North Sea from BP and ConocoPhillips rigs helped to support crude prices.

'Tight market'

Platforms pumping more than 200,000 barrels of oil a day in the North Sea were closed due to bad weather, exacerbating concerns about the availability of crude.

Prices hit a record high above $98 a barrel of Wednesday, leading many analysts to speculate that it was only a matter of time before the $100 mark was breached.

But prices then fell back sharply after US crude inventory figures showed a smaller than expected weekly fall.

Analysts still expect oil to break $100 a barrel
The weaker dollar has been driving up oil prices as investors have been using the commodity as an alternative to holding dollars.

"Markets have probably rethought how tight the market is and might be in the near term and that has caused an upward adjustment," David Moore, a commodity strategist at the Commonwealth Bank of Australia, said of Friday's price jump.

Oil prices have now risen by 60% this year but prices have still not reached a record high if inflation is taken into account.

Adjusting for inflation, US light crude's record peak of $101.70 came in 1980 against a backdrop of war between Iraq and Iran.

The dollar's current weakness has also seen prices of other commodities rise sharply, most notably gold, which is continuing near 27-year highs.