The price of oil rocketed to a record high 129.46 dollars on Tuesday as investors dived into a market driven higher by concerns about tight global energy supplies and strong demand.
After striking the historic summit, New York's main oil futures contract, light sweet crude for June delivery, pulled back slightly to stand at 129.16 dollars a barrel, up 2.11 dollars on Monday's close.
London's Brent crude contract for July hit an all-time peak of 127.73 dollars Tuesday. It later stood at 127.41 dollars, up 2.35 dollars.
The market was reacting to oil supply disruptions in France and OPEC's unwillingness to hike output, analysts said.
"Overall, (oil) market participants are currently choosing to focus on the supply side, with investors doubting that robust demand for distillate fuels from Asian, Middle Eastern and other emerging market economies would be met with enough supply," said Sucden analyst Andrey Kryuchenkov.
French fishermen demanding state aid to cope with soaring fuel costs blockaded France's largest Mediterranean oil depot at Fos-sur-Mer on Tuesday, escalating a 10-day protest movement.
Around 50 fishermen used tyres and crates to set up roadblocks cutting access to the Fos-sur-Mer depot, causing a tailback of some 100 tanker trucks that were lined up waiting to enter, according to an AFP correspondent.
Bank of Ireland analyst Paul Harris meanwhile said that OPEC's refusal to consider output levels before a meeting in September was "further weighing on supply concerns and adding to upward price impetus."
OPEC president Chakib Khelil said Monday the oil group would take no decision on output levels before a meeting in September despite calls by the United States for a hike to dampen soaring prices.
Khelil said that he did not expect output to be increased, stressing that "current prices are not based on (traditional) supply and demand."
Many officials belonging to the Organization of Petroleum Exporting Countries argue that record oil prices are being driven by speculators rather than investors reacting to the actual supply-demand balance.
Weakness in the dollar has also supported prices, with commodities priced in the US currency becoming cheaper for holders of stronger currencies.
Oil prices have jumped more than a quarter since the start of 2008, when they struck 100 dollars a barrel for the first time. Also driving the market in recent weeks has been unrest in OPEC member Nigeria, which is also Africa's biggest exporter of oil.
US President George W. Bush, during a visit to Saudi Arabia last Friday, pressed the world's biggest oil producer to increase output to help cool runaway prices that are fuelling inflation and weighing on economic growth in the United States and other countries.
In response, Saudi Arabia's Oil Minister Ali al-Nuaimi said the kingdom had increased oil production by 300,000 barrels per day from May 10 in response to orders from customers, mostly from the United States.
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