Oil trades above 132 dollars a barrel

Oil traded higher at more than 132 dollars a barrel on Monday as the US summer driving season kicked off, underscoring concerns that output was inadequate to meet rising demand.

Tightness in the oil market has made prices sensitive to a confluence of factors, including a weak US dollar, speculative funds, an unwillingness by oil-producers to raise production and geopolitical tensions, analysts said.

In morning Asian trade, New York's main oil futures contract, light sweet crude for July delivery, was up 37 cents to 132.56 dollars a barrel, after closing at 132.19 dollars a barrel in New York on Friday.

Electronic trading on the New York Mercantile Exchange was unaffected by the US Memorial Day holiday on Monday.

The US summer driving season, which kicked off at the weekend, is a time when Americans take to the roads on their vacations, boosting fuel demand in the world's biggest economy and affecting global prices.

London's Brent North Sea crude for July delivery was trading at 131.90 dollars a barrel, up 33 cents.

On Thursday, Brent struck an all-time high of 135.14 dollars and New York crude reached a record 135.09 dollars, before both contracts plunged as investors banked profits.

Crude futures have risen by more than a third since the beginning of 2008 when they struck 100 dollars for the first time, lifted by unrest in some of the oil-producing countries, falling energy inventories, high Asian demand for fuel and a weak dollar.

A struggling US currency makes dollar-commodities cheaper for foreign buyers.

Reluctance by the Organisation of Petroleum Exporting Countries (Opec) to hike their output has also helped keep prices high.

Opec secretary general Abdalla Salem El-Badri said last week that the cartel's members were unhappy with surging prices which he blamed on speculators and a weak dollar.

Opec, which produces 40 percent of the world's oil, is reluctant to bend to US-led demands for it to pump more crude to help cool rocketing prices.

The 13-nation cartel insists that the market is well supplied and that record prices reflect speculative investment activity rather than actual supply and demand conditions.