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Price of oil jumps after Texas blast

World oil prices jumped half a dollar yesterday, led by a rally in gasoline to an all-time record after an explosion and fire at the third largest refinery in the US.

US light crude rose US$0.52 to US$36.77 a barrel, while London's Brent crude climbed US$0.55 to US$33.00 a barrel.

Prices were already on the rise before the Tuesday evening refinery blast at BP's plant in Texas on expectations that the powerful OPEC's producers' cartel will go through with a planned cut to global crude supplies from April 1.

OPEC ministers, which control about 50 percent of global crude exports, will meet on Wednesday at 1000 GMT in Vienna.

BP said there was no indication of "any outside influence" in the blast and fire, which comes less than a week after the US Federal Bureau of Investigation issued Texas oil refiners a warning about possible terror attacks to coincide with US elections in November.

The fire hit a gasoline-producing unit, reviving concerns of a motor fuel supply crunch in the peak demand summer months and sending US unleaded gasoline futures to an all-time high at US$1.1770 a gallon, surpassing a May 2001 record at US$1.1750.

"The impact [of the blast] is much bigger than OPEC because US gasoline demand is expected to be strong this year while inventory level is still low. Gasoline is likely to lead the market," said Tony Nunan, manager at the international petroleum business of Mitsubishi Corp.

The US government Energy Information Administration was due to release later yesterday its weekly snapshot on US commercial fuel stocks.

Early comments from OPEC ministers from Qatar, Libya, Algeria, Iran and Venezuela indicated the one-million-barrel-per-day output reduction would go ahead on April 1 as agreed at the previous meeting in February.

Saudi Arabia, OPEC's biggest producer, had already thrown its weight behind the supply cuts on Tuesday.

"So far that is what we have decided, no one has put forward an alternative proposal," said Qatari Oil Minister Abdullah al-Attiyah.

Venezuelan Energy and Mines Minister Rafael Ramirez said: "Yes, I believe," when asked whether there was consensus within the cartel for implementing the April 1 cut.

Some OPEC members had suggested in recent weeks that the output curbs may be delayed after US crude prices scaled to 13-year highs on strong demand, especially in China, low US fuel inventories, security fears after the train bombs in Madrid and heavy buying by speculative funds.
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