Oil price heading for $50

SAUDI Arabia made a fresh attempt to cool global oil markets today as US crude raced to another all-time high on fears of a supply squeeze.

Crown Prince Abdullah bin Abdul Aziz insisted the kingdom wanted to see oil at between $25 to $30 a barrel and had the capacity to meet growing demand.

'I truly tell you that the kingdom does not want to harm the world economy,' he told a Kuwaiti newspaper.

His comments mark the second time in a week that Saudi Arabia has moved to reassure markets, given the series of records set since the start of the month.

Today, US crude hit $46.91 a barrel before Venezuela's President Hugo Chavez was declared the winner of a referendum on his future with a 58% majority. Opposition leaders declared the result a 'gigantic fraud'.

Venezuela pumps out three million barrels a day, with 15% sent to the US, and there were mounting concerns civil unrest around the referendum could affect crude exports.

US crude was off 26 cents at $46.32 after the result, while Brent was off 48 cents at $43.30.

But analysts said $50 a barrel was a real possbility given continuing fears of a supply squeeze.

Orin Middleton at Barclays Capital, said: 'If we get a repeat of last week's move we'll be there by Friday. People keep talking about speculative bubbles but if you look at supply and demand this is where we should be.'

Iraqi exports were running at half normal levels after a Shi'ite uprising in the south of the country.