Indian oil basket close to $100/bl

The basket of crude oil that Indian refineries buy is just 12 cents short of hitting the $100 per barrel-mark as it touched another fresh high of $99.88 a barrel on Friday, the latest day for which data is available.

A weakening dollar against major currencies has resulted in crude oil prices hitting all-time highs with crude oil for April delivery on the New York Merchantile Exchange hovering around $105 per barrel on Monday.

The Indian crude oil basket, which comprises Oman-Dubai sour (high sulphur) grade crude oil and Brent dated sweet (low sulphur) crude oil in 61.4:38.6 ratio, has averaged $98.11 a barrel so far this month as against $92.37 a barrel in February and $89.52 in January, government data showed.

Previously, the basket had touched a record high of $98.99 a barrel on March 6.

Meanwhile, Crude oil rose to a record $107 a barrel in New York as investors purchased futures because the returns have outpaced those of financial markets.

Oil in New York has surged 77 per cent over the past year as the S&P 500 and Dow averages dropped. Hedge-fund managers and other large speculators increased net-long positions, or bets on higher oil prices, in the week ended March 4, a Commodity Futures Trading Commission report showed.

London Brent crude rose 10 cents to $102.48.

"The re-opening of the oil ports in Mexico has taken away some of the bullishness but the cold snap in the United States is still supportive of prices," said David Moore, a resource analyst at the Commonwealth Bank of Australia.

One of Mexico's three main crude oil ports, Dos Bocas, reopened to shipping, the transport ministry said yesterday, after a three-day closure because of bad weather in the Gulf of Mexico.

Mexico, the world's No. 9 exporter of crude oil and a top three supplier to the United States, has seen its crude exports repeatedly disrupted in recent months, often resulting in its crude shipments being halted for days at a time.

A late-season winter storm slammed into the Ohio Valley on Saturday, with freezing rain, ice and sleet forcing flight delays and cancellations at airports and forecasters predicting the storm to head towards the U.S. Northeast.

Analysts said a sliding US dollar, which fell back toward a record low against the euro and an eight-year low versus the yen on Monday, were also keeping oil prices near records.

Easing tensions between Opec member Venezuela, a top oil exporter to the United States, and neighbor Colombia, also kept oil price gains in check.

The presidents of Colombia, Ecuador and Venezuela ended a border dispute on Friday, after a week of regional diplomacy in the face of hostile rhetoric and troop build-ups.

Still, some analysts say expectations of more dollar weakness, continued tensions in Nigeria and the Middle East as well as increased speculative funds pouring into commodities could keep pushing oil prices to new highs.

NYMEX crude has set an intraday record 12 times since January 2, when prices first hit $100. Settlements above $100 have been reached in nine of the last 14 sessions, the latest being Friday's $105.15.

Crude speculators on the New York Mercantile Exchange hiked net long positions last week, according to data from the Commodity Futures Trading Commission released on Friday.

Net crude long positions rose to 99,539 in the week to March 4, up from 91,625 in the week to February 26.