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Oil could hit $200, OPEC president says

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Date: Monday 28 Apr 2008

LONDON (ShareCast) - The falling dollar could push oil prices to £200-a-barrel, Algeria’s El Moudjahid newspaper quoted OPEC president Chakib Khelil as saying.

Khelil, who is also the North African country’s minister of mines, said the rising oil price was not due to supply problems, but the economic crisis in the US and the consequent reduction in the dollar’s value, according to El Moudjahid.

He added that a 1% fall or rise in the greenback's value had the effect of moving the price of a barrel of oil by $4 in the opposite direction. The paper also quoted him saying that there is a balance between supply and demand, with US petrol stocks at their highest level for five years.

Khelil’s comments come as crude oil prices hit records near $120 a barrel amid a strike at Scotland’s main oil refinery and after an attack on police at Nigeria’s biggest oil terminal.

Oil giant BP closed a pipeline transporting 40% of the UK’s production after staff at the Grangemouth refinery went on strike, cutting power supplies. Five police were killed in the Nigerian attack.

Crude oil for June delivery reached $119.93 a barrel in overnight trading on the New York Mercantile Exchange.

The rising crude prices lifted oil majors higher in UK trading, with Cairn Energy gaining nearly 5%.

Elsewhere in the sector, Tullow Oil announced that Tom Hickey has resigned from the board and from the position of chief financial officer of the oil and gas exploration group.