Opec Ponders Emergency Talks As Oil Price Approaches Record

Concern over dwindling oil stocks in the United States pushed oil prices to their highest in 13 years yesterday and sent fresh tremors through financial markets.

Amid fears that even an agreement from the Opec cartel to pump more crude would not be enough to meet demand, prices in New York hit a peak of $40.55 a barrel, only 60 cents off the record in October 1990 during the build-up to the first Gulf war.

Opec said it might hold informal talks next week ahead of its meeting in Beirut in June, but its president, Purnomo Yusgiantoro of Indonesia, said the cartel was already pumping more than 2m barrels a day above official limits in an attempt to cool world oil prices.

"We have not discouraged our members from produc ing more because we want to do everything we can to stabilise prices."

On Wall Street, rising fuel prices added to gloom from an unexpectedly large increase in the US trade deficit to almost $46bn (£26bn) in March, almost $4bn worse than the markets had anticipated. The higher cost of imported energy will add tothe deficit - running at $500bn a year - but should help to nar row Britain's trade gap. Figures from the Office for National Statistics showed Britain's shortfall in goods and services narrowed slightly to £2.9bn in March, with a deficit of £4.1bn in goods partly offset by a surplus of £1.2bn in services.

Officials said the underlying trend was worsening, with exports falling and imports rising. The quarterly deficits of £10.4bn in goods and services and £13.7bn in goods alone were both records.

In early trading, the Dow Jones average fell more than 130 points back through the 10,000 level to below 9,900. The Nasdaq index lost more than 2% amid disappointment over Cisco results. In the City, the FTSE 100 closed 41 points lower at 4412, losing most of Tuesday's gains.