Britain looked set for a summer of high oil and petrol prices yesterday as oil reached a record of more than $115 a barrel. The price surge came as Opec insisted that it did not intend to increase supply, an apparent snub to Gordon Brown.

US crude struck a record $115.15 after the Energy Information Administration reported that stocks had fallen unexpectedly by 2.3 million barrels.

Calls by Mr Brown for Opec to boost production have fallen on deaf ears. Shokri Ghanem, the head of Libya’s Opec delegation, said yesterday that there was no need for the delegation to meet to consider any increase. “Supply is more than the demand. Opec cannot do much,” he said.

Opec said that financial speculators were fanning the rising price because the weak dollar had encouraged investors to pump money into oil, which has been trading at above $110 for almost two months.

Some market experts are predicting that prices will top $120 a barrel this quarter. Robert Laughlin, energy broker with MF Global, said: “Oil at over $120 a barrel is highly likely in the second quarter because Opec doesn't want to give us fresh barrels despite being asked by George Bush, Gordon Brown and everyone else.

“The trend for prices is certainly upward and I would not be surprised to see $120 a barrel oil between now and the end of June,” he said.

Such an increase would see the price of petrol push through the psychologically significant £5 a gallon level across the country. Luke Bosdet, an AA spokesman, said: “We are getting pretty close to the £5 gallon and we have already seen some motorway service stations charging 110p a litre for petrol.”

Drivers in the UK are paying a record average of 107.94p for a litre of unleaded petrol, according to the AA. Every $2 dollar increase in the cost of oil adds roughly 1p to a litre of petrol at the pump.

Many industries are already groaning under the weight of the record oil price, not least the airline industry, which saw four US airlines collapse last week. Collins Stewart, the UK broker, slashed forecasts for airlines after taking into account a sustained period of oil at more than $110 a barrel.

The broker made cuts of 12 to 53 per cent on earnings across the airline sector. The worst affected, according to its model, are Aer Lingus and Ryanair.

There are concerns that British manufacturers, who are already seeing sharply increased costs, will not be able to pass the impact of higher fuel prices on to their customers.

“We have already seen that input costs rose by 20 per cent in the last two months - half of that price increase was due to the increase in the crude oil price,” Jeegar Kakkad, senior economist at the EEF, the manufacturers' group, said.

“The concern is that falling demand from the US will not be enough to offset supply constraints or the impact of speculation on oil,” Mr Kakkad said.

Lai Wah Co, head of economic analysis at the CBI, said that manufacturers of glass, chemicals, ceramics and plastics were particularly vulnerable to the pressures of a high oil price.

“They have been bearing these higher costs for a number of years and it will be tough for them to continue bearing a greater part of the increase,” she said.

Energy experts see no end to the upward pressure on oil prices because of historical underinvestment in refining capacity, as well as soaring demand from the developing economies of India and China for fuel and other commodities.

China imported 490,000 metric tonnes of diesel in March, a rise of 49 per cent from the previous month. China is building stocks of key transport fuels prior to the Olympic Games and its spring planting season is under way, with farmers working at full capacity.

Oil prices in the US traditionally surge in summer, the so-called driving season, when motorists travel across the country on holiday and energy consumption peaks because of the widespread use of air-conditioning.

Oil also continues to benefit as investors seek higher returns than they can get in financial markets at present. On Tuesday Opec left its estimate of growth in world oil demand this year unchanged, arguing that while high prices and slowing economies will brake demand in major industrialised countries, appetite for crude will remain robust elsewhere.

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