Oil prices rise before key US energy report

New York’s main oil futures contract, light sweet crude for July delivery, added 16 cents to 134.17 dollars per barrel, as the European trading day began.

The contract had struck a record high point 139.89 dollars on Monday as the market was gripped by supply jitters and the weak dollar, despite news that Saudi Arabia could lift production to help dampen prices.

Brent North Sea crude for August delivery added 28 cents to 134.00 dollars per barrel on Wednesday, after reaching an all-time high of 139.32 dollars on Monday.

Later Wednesday, the US Energy Information Administration (EIA) will release its update on American crude oil stockpiles for the week ending June 13.

The weekly report has the potential to push oil prices to fresh records if it reveals sharp falls in US energy reserves, traders said. Conversely, big rises in stockpiles could spark fresh losses.

"Maybe a new (record) high or a dip to or below 130.75 dollars -- it depends on (US) inventory," Ryoma Furumi, a broker at Newedge Japan, told Dow Jones Newswires when asked about the market outlook.

On Tuesday, crude futures had retreated from record heights amid profit taking ahead of Saudi Arabia’s expected output increase.

Over the weekend, UN Secretary General Ban Ki-Moon announced that Saudi Arabia had told him it would increase its oil output by 200,000 barrels a day in July.

The UN chief’s remarks came ahead of a meeting to be hosted by Saudi Arabia in Jeddah this Sunday, when major oil producers and consumers will discuss skyrocketing oil prices that are weighing on global economic growth.

However, analysts have expressed doubt about whether the increase will lower oil prices in the long-term amid fierce demand from Asian powerhouse economies China and India.

Global finance officials fear that soaring crude oil prices pose a threat to world economic growth, as higher inflation leads central banks to raise interest rates.