The president of Opec, the cartel of oil-producing countries, has given warning that the price of crude could hit $200 a barrel, sparking fears that rising fuel costs will force more businesses into bankruptcy.

Chakib Khelil, the Algerian Energy Minister and president of Opec, said that the falling value of the US dollar would continue to drive up oil prices as investors sought to store their wealth in other assets.

Lehman Brothers, the bank, has said that high prices are being sustained by an influx of money into the oil market from investment funds.

It estimates that "hot money" accounts for between $20 to $30 of the recent increase in oil prices and about $40 billion (£20 billion) has been invested in the sector so far this year — equal to all the money pumped into oil last year.

The price of oil hit an all-time high of nearly $120 a barrel today after North Sea production was shut down yesterday because of a strike at the Grangemouth refinery in Scotland.

In early trading the price of US light crude rose $1 to $119.93 amid concern about the impact of industrial action at Grangemouth.

This came on top of a $2.50 gain on Friday and leaves the price of oil up more than 25 per cent since the start of the year.

The price of Brent oil rose 83 cents to $117.17 and oil analysts have predicted that further price rises are likely in the coming months.

Supply shortages are expected to get worse over summer, which is hurricane season in the Gulf of Mexico.

In addition, demand usually rises in hot months when air-conditioning units are operating at full blast. If financial investors continue to pour money into oil funds, as the president of Opec has suggested, this could cause prices to spike even higher.

Today's price rises came as workers at Grangemouth, which is operated by Ineos, a chemical company, began a two-day walkout yesterday over pension benefits.

This forced the closure of the 700,000 barrel-a-day Forties pipeline and sparked fears that Scotland and the North of England could face petrol shortages.

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