Bush Pushes for Alaskan Drilling As Oil Prices Climb

Oil prices were last night skirting record highs as a United States report showing plentiful stocks of crude failed to ease longer term concerns about possible shortages.

Brent crude rose $1.21 to a highest ever $54.05 a barrel in London, breaching the previous record of $53.32.

In the US, crude oil prices came within a few cents of previous highs, as fears of shortages were compounded by a cold snap across the country's north-east. A barrel of US light crude rose $1.06 to $55.65, just below the $55.67 high hit in late October. Prices have climbed more than 25% since the start of the year.

President George Bush yesterday seized on the soaring price of oil to renew the push for his long-stalled energy bill during a speech in Columbus, Ohio, where he cautioned against rising dependence on overseas oil.

The bill's more controversial elements would open up the Alaska National Wildlife Refuge to oil and gas drilling, relax pollution standards and give massive tax breaks and incentives to energy producers, including coal. He also renewed calls for America to build nuclear power plants again after a gap of more than 30 years. "Uncertainties about energy supply are dragging on our economy," he said. "It's hard to plan with confidence if you're not sure the lights are going to stay on".

Concerns over rising energy costs dampened stock markets on both sides of the Atlantic. The FTSE 100 Index in London ended the day 14.8 points lower at 4996.1. On Wall Street, the Dow Jones Industrial Average was trading 71 points lower at 10,841 at midday.

The fears were not allayed by official US data showing crude oil stocks grew for the fourth straight week to 302.6m barrels, the biggest stockpile for eight months.

Increasing demand in the US, China and India and supply problems in Russia and Nigeria have put pressure on prices. The concerns will dominate the meeting of the Opec, the producers' cartel, in Iran next Wednesday.