Oil jumps $5 as U.S. stockpiles fall

By Richard Valdmanis

NEW YORK (Reuters) - Crude oil prices on Wednesday jumped more than $5 to within sight of the record after a report showed stockpiles in the United States fell sharply for the fourth week in a row, intensifying worries of a worsening global crunch.

Weakness in the U.S. dollar and supply problems in OPEC member Nigeria encouraged the rally, dealers said.

"The big crude draw is obviously bullish, but more importantly for the oil markets, the dollar is falling and that could send us back to near $140 a barrel," said Mark Waggoner, president of Excel Futures in Huntington Beach, California.

U.S. crude oil prices rose $5.07 to settle at $136.38 a barrel, within reach of last week's record near $140. London crude rose $4.45 to $135.47 a barrel.

Oil prices have risen nearly seven-fold since 2002 amid rising demand from China and other developing countries, pressuring major consumers like the United States already hobbled by a housing slowdown and credit crunch.

Representatives of the world's biggest oil consumer and producer nations will meet in Saudi Arabia June 22 to discuss the oil spike, which producer group OPEC says is due to speculation, not a lack of supply.

U.S. regulators are also slated to meet this week to discuss oversight of the oil and commodities futures markets amid pressure from lawmakers who also blame speculators for inflation in food and energy costs.

Wednesday's oil price gains came after the U.S. Energy Information Administration reported that crude stockpiles dropped 4.6 million barrels last week, the fourth consecutive weekly decline amid soft import levels.