Oil climbed back towards $71 a barrel today to reverse a two-day slide as problems at two US refineries concentrated investors' minds on gasoline supplies in the world's biggest consumer.
Opec, as expected, agreed yesterday to keep pumping close to full capacity, but prices held within sight of their record high, frustrating oil ministers worried that sustained high prices could slow economic growth.
"We do not expect that production cuts will be needed over the next two quarters," Deutsche Bank analysts said.
Strong demand from the United States and China, a shortage of refineries to produce motor fuels, and supply problems in Iraq and Nigeria have fed into a four-and-a-half year rally that has added $50 to a barrel of oil.
US crude oil rose 52 cents to $70.86 a barrel by 10.15am, in striking distance of the $75.35 all-time high hit on April 21st. London Brent gained 44 cents to $69.83.
"With new lows on the US dollar on the horizon and Opec production at a record high the cartel is in a powerful position to defend any deterioration in their purchasing power entering 2007," Deutsche Bank said.