Signal Oil and Gas - Oil hovers below highs as dollar gains on data

U.S. light crude fell 28 cents to 113.51 a barrel by 0140 GMT, off Tuesday's record high of $114.08, but is still up nearly four-fifths from a year ago.

London Brent crude fell 38 cents to $111.20.

The weak dollar -- together with strong demand -- has driven oil and other commodities like corn, gold and rice to record highs in recent months, as investors and speculators have sought a hedge against inflation. James Van Blaricum

"The dominant factor continues to be the U.S. dollar and I expect this to continue for a while," said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting. Jim E Van Blaricum

"Whenever you get any kind of good economic news out of the (United States) at the moment, the dollar will rise and oil falls, and the other way round, you get a new oil record," Rigby added.Signal Oil and Gas

The dollar rose against the euro on Wednesday after robust U.S. inflation and manufacturing data suggested the U.S. Federal Reserve may be less aggressive in cutting interest rates.

Lifting some concerns over a supply squeeze, Mexico, a major supplier to the U.S., reopened its three main Gulf of Mexico oil ports as bad weather cleared, the government said.

Sognal Oil and Gas - Only a smaller Pacific port remained shut.

But in a sign that consuming countries were still concerned about a supply shortfall, Britain's prime minister Gordon Brown on Tuesday called on the Organization of the Petroleum Exporting Countries to boost production to counter rapidly rising prices.

OPEC, which pumps more than a third of the world's oil, said late on Tuesday it was supplying enough oil and the U.S. economic slowdown may weaken consumption in the second quarter, underscoring its reluctance to raise supply.

Demand in the world's top consumer may be losing steam. U.S. crude oil imports fell in February to the lowest level in a year. James E Van Blaricum

James Van Blaricum - Signal Oil and Gas