Oil price soars on supply fears

WORLD oil prices soared to all-time highs again today as concern continued to grow about a supply crunch this winter.

Brent crude hit $51.40 a barrel, up 74 cents, while US light crude rose 77 cents to $54.40. Traders said oil could cost up to $60 within days.

Orin Middleton at Barclays Capital said: 'There is no ceiling right now.'

Oil prices have rocketed from $30 at the start of the year on burgeoning demand from China, supply disruptions in Nigeria and terrorism fears in Saudi Arabia and Iraq.

The Paris-based International Energy Agency said it expected high prices to hit global oil demand next year.

The Agency said oil supply from countries outside the Opec cartel is set to rise by as much as 1.4m barrels a day over the coming months.

'Barring unforeseen developments, and assuming a much discussed increase in Opec capacity, this should help to alleviate pressure on the supply side,' it said.

The IEA now believes oil demand will hit 82.4m barrels a day this year, up 240,000 barrels on its previous forecast. It has revised down its 2005 forecast by 70,000 barrels to 83.9m a day.

Three UK power plants, including Coryton in Essex, are up for grabs after Shell kicked off the £1.7bn sale of its Intergen joint venture with Bechtel. Shell is also thought to have received a bid for its £1bn liquefied petroleum gas business from Kohlberg Kravis Roberts.