Concern about the dispute between Iran and the West over Tehran’s nuclear work, a weakening dollar and a gathering storm in the Atlantic supported prices, as did a bullish picture based on past price moves.

“Technically, the recovery towards the end of last week and the strength we saw yesterday still keeps the bull trend very much intact,” said Christopher Bellew, a broker at Bache Commodities.

United States crude was up 30 cents at $145,48 a barrel by 2pm GMT, within sight of its all-time high of $147,27 hit last week. London Brent crude was up 60 cents at $144,52.
Opec cut its forecast for global oil demand growth in 2008 for a fourth time this year and said consumption would slow in 2009, signalling a more comfortable supply-and-demand balance.

The 13-member group, source of two in every five barrels of oil, also said the need for its oil in 2009 would post the first significant decline since 2002 due to slower world demand and rising supply from non-member countries.

Oil eased earlier in the session as Chevron said production had been restored at the 120 000-barrel per day Escravos pipeline in Nigeria, resolving one of the disruptions that have cut the country’s supply.

Traders were also keeping watch on an oil workers’ strike in Brazil that started on Monday. State-run energy firm Petrobras said it had already reversed most of the production losses on its platforms.

Crude has risen from $20 a barrel in January 2002 on growing demand from nations like China and rising cash inflows into commodities from investors seeking to hedge against inflation and the weak dollar.

The dollar fell to a record low against the euro on Tuesday amid concern about the health of the US financial sector weighing on sentiment. Investors said renewed weakness in the US currency could support oil.

“The financial crisis is not over. We are not optimistic; the dollar should get weaker and we should see more investor money turn to commodities and energy,” said Tetsu Emori, fund manager at Astmax in Tokyo.

Traders were also keeping watch on a low-pressure weather system about 1 900km east of the Lesser Antilles, which may develop into a tropical depression.

Energy traders watch for storms that could enter the Gulf of Mexico and threaten US oil and gas production facilities.

The latest snapshot of supply in the US, the world’s top oil consumer, due for release on Wednesday, will provide direction for prices later in the week.

A Reuters poll forecast that US crude stocks fell by 1,2-million barrels, petrol inventories dropped by 300 000 barrels while distillates rose by 1,9-million barrels. — Reuters