LONDON, Sept 13: The price of New York oil hit a fresh record high of $80.20 a barrel on Thursday on trader worries that stormy weather could hamper energy production in the US Gulf of Mexico.

US oil prices began their record-breaking surge on Wednesday after news that American crude reserves dived lower last week, compounding concerns over tight global energy supplies despite Opec’s move to hike output.

Later on Thursday, New York’s main futures contract, light sweet crude for delivery in October, stood at $79.70.

In London, the price of Brent North Sea crude for October delivery soared as high as $77.86 per barrel, before pulling back to $77.45.

Brent’s record high stands at $78.40, which was set in 2006.

Shortly after US floor trading opened, the price of New York crude touched another all-time record following the closure of several US refineries in the path of Hurricane Humberto, traders said.

However, Humberto has now weakened into a tropical storm, after barrelling over south-eastern Texas and Louisiana as a hurricane, according to the US National Hurricane Centre.

“Certainly in the very short term we do have some hurricane-related volatility in market,” said Citigroup analyst Tim Evans.

“There were at least two refineries that lost electrical power and shut down as a result of the storm.

“That has pushed gasoline prices in particular to the upside on Thursday and we did get a new all-time high for New York crude along with that.”

The closures jangled supply fears in what is already viewed as a very tight market.

The US Department of Energy revealed on Wednesday that US crude inventories fell by a sharper-than-expected 7.1 million barrels in the week to Friday, 7 September.

The drop was almost three times heavier than analysts’ consensus forecasts.

A decision on Tuesday by the Organisation of the Petroleum Exporting Countries to pump an extra 500,000 barrels of oil per day from November would provide little relief to the tight market, analysts said.

“This move by the (Opec) producer group has failed to calm markets concerned about tight crude supplies, with investors still expecting a potential shortfall in the fourth quarter,” said Sucden analyst Michael Davies.

“Many experts are already saying that such an increase in output is unlikely to reverse oil prices.”

Opec’s “basket” price of crude oil, based on production in 12 different countries, rose to a record $74.21 a barrel on Wednesday, the cartel announced on Thursday.

The record-breaking week for the oil market came despite an announcement by the International Energy Agency that it was lowering its predictions of global crude demand for this year and 2008 because of ongoing turbulence across financial markets.

—AFP