Oil hits fresh high after Ecuador pipeline rupture

By Luke Pachymuthu

SINGAPORE (Reuters) - Oil touched a new high above $103 on Friday after Ecuador shut a key export pipeline and a fire hit a major European natural gas plant, while the U.S. dollar's fall to a series of lows kept fresh funds flowing in.

Prices later shed initial gains, with U.S. crude down 4 cents to $102.55 a barrel by 0344 GMT, after hitting $103.05 in early morning trade, smashing the inflation-adjusted high of $102.53 reached in 1980, a year after the Iranian revolution.

London Brent crude dropped 6 cents to $100.84 a barrel.

The spike came ahead of OPEC's meeting in Vienna next week, where most members now say they are unlikely to raise production due to hefty global crude and fuel stocks ahead of the second quarter.

"Hedge funds are taking advantage of the very weak dollar, but the fundamentals are very poor," said Makoto Takeda of Tokyo's Bansei Securities.

The Trans-Ecuadorean pipeline, which pumps most of the oil extracted by Petroecuador in the Amazon jungle to ports on the Pacific Ocean, was shut after a landslide punctured it.

State oil firm Petroecuador initially said it would declare force majeure on shipments from the pipeline, but shortly thereafter reversed the decision, saying it would bypass the damage or use a private pipeline.

Oil surged late Thursday after a fire at the Bacton Gas Shell terminal in Norfolk, England, shut more than 45 million cubic metres per day of gas supplies, about 13 percent of the UK national grid's forecast demand.