Oil floats near record

By Louise Heavens

SINGAPORE (Reuters) - Oil prices traded within sight of a record high on Wednesday, capping any gains for the dollar, while resource stocks in Asia rose on sky-high energy and metals prices.

U.S. crude was steady at $121.79 a barrel, just off a record high at $122.73 in New York. Prices have doubled in the past year and Goldman Sachs -- which had predicted oil would hit $100 a barrel -- forecasts a potential spike to $200.

The surge in energy prices, agricultural commodities and base metals -- a headache for central banks eager to ward off inflation -- boosted shares in Japanese trading houses, such as Marubeni (8002.T), and Australian miners, such as Rio Tinto (RIO.AX) and BHP Billiton (BHP.AX).

Asian equity markets were also supported by Wall Street's advance on Tuesday after officials of the largest U.S. mortgage financing company Fannie Mae (FNM.N) said they were cautiously optimistic that the worst of the credit crisis had passed even after posting a $2.5 billion quarterly loss.

Japan's Nikkei average .N225 rose 0.9 percent by the midsession as the country's financial markets reopened after being closed on Monday and Tuesday for national holidays.

MSCI's measure of Asian stocks outside Japan .MIAPJ0000PUS was up 0.2 percent by 3:11 a.m. BST, having earlier hit its best level since mid-January. The benchmark is down just under 6 percent so far this year.

But some investors were unconvinced that the worst of the credit crisis was over.

"The financial sector will probably remain perhaps a little under pressure for the time being," said Martin Angel, a dealer at Patersons Securities.