Oil Near $108 After Saudi Explosion Report Denied

Whether crude costs $60 a barrel or twice that amount, the U.S. is almost free of depending on imported energy and positioned to supplant Saudi Arabia as the world’s No. 1 producer of oil.

A surge in U.S. oil production has pushed the country’s output to the highest level since 1992, threatening the dominance of the Organization of Petroleum Exporting Countries. The U.S. pumped 7.06 million barrels a day in the week ended Feb. 8, up 1 percent from the previous week and extending last year’s 19 percent gain, the Energy Information Administration said today. OPEC production fell to the lowest level in a year in January, the Paris-based International Energy Agency said today in its monthly report.

World oil prices fell slightly on Monday, as OPEC kingpin Saudi Arabia said the cartel may raise its crude output to meet an increase in demand this year.New York's main contract, light sweet crude for delivery in March, slipped 42 cents to $88.68 a barrel.Brent North Sea crude for March delivery edged down four cents to $97.56.The Organization of Petroleum Exporting Countries (OPEC) could raise output to meet a "two percent" increase in demand during 2011, Saudi's oil minister said on Monday.

SINGAPORE (Reuters) - Brent crude eased below

Brent crude will hover around US$100 a barrel for the next two years, a Reuters poll showed after analysts slashed their forecasts for the oil price to reflect ample supply and sluggish economic growth. Brent crude oil will average US$107.60 per barrel this year, Reuters monthly oil price survey for April predicted on Tuesday, down from US$110.80 in last month’s poll and below last year’s average price of US$111.70.

Jon D. Markman submits: Crude oil futures spiked to a 30-month high on Monday - and crude prices have zoomed 19% so far this year - so it's no surprise that energy stocks have enjoyed one whale of a run.Even so, energy stocks continue to top my list of favorite plays - and for one very good reason. I'm talking about Yemen. Small Country/Big Potential Impact

Oil prices closed in on $120 Monday, hitting two-and-a-half-year highs on expectations of higher demand as strong US jobs data offset concerns over Middle East supplies.Brent North Sea crude reached an intra-day high of $119.75 a barrel. It later pulled back, with the May contract at $119.31, up 61 cents from Friday's close.New York's main contract, light sweet crude for delivery in May, reached $108.78 a barrel -- the highest level since September 2008. It went on to stand at $108.40 at about 1140 GMT, up 46 cents from Friday.