LONDON, Nov 2: Oil prices climbed on Friday to within sight of record levels on concern about the weak dollar and tight global energy supplies heading into the northern hemisphere winter, traders said.
New York’s main futures contract, light sweet crude for delivery in December, rallied $1.18 to $94.67 a barrel. It had hit a record high of $96.24 on Thursday.
Brent North Sea crude for December delivery climbed $1.03 to $90.75, after hitting $91.71 on Thursday.
“It is clear that the market has $100 a barrel in its sights and this landmark is set to be breached before year-end,” said Bank of Ireland analyst Paul Harris.
This week, the price of oil soared to dizzy heights after news of tumbling crude reserves in the United States, the world’s biggest energy consumer.
The market was also roiled by geopolitical tensions between Turkey and crude producer Iraq.
Since the start of October, New York crude has gained approximately 13 dollars in value and London Brent about $12.But prices ended on Thursday with losses as traders took profits -- and tracked plunging global stock markets amid renewed worries over the extent of the US subprime or high-risk mortgage crisis.
“Oil was up on Friday after Thursday’s subprime-related sell off,” said Michael Davies at the Sucden brokerage in London.
“One other factor probably helping crude today is the weaker dollar, which makes crude relatively cheaper for foreign buyers.
“The dollar has been under considerable pressure because of the weak US economic outlook, which has persuaded the Fed to cut rates.”
Oil futures moved sharply higher on Wednesday after the US Department of Energy revealed that crude inventories had slumped 3.9 million barrels in the week ending October 26.
The figures shocked the market because analysts’ consensus forecast had been for a modest gain of 400,000 barrels.
Industry experts are tracking global energy inventories because they are fearful of a supply crunch during the northern hemisphere winter months, when demand for heating fuel hits a peak.
Oil prices have jumped by some 50 per cent over the past year although adjusted for inflation, they remain below levels reached after the 1979 Iranian revolution.
Current prices would have to go just above $100 to reach outright, as well as nominal records, according to economists.
Meanwhile on Friday, Opec’s basket price of crude oil, based on production in 12 different countries, hit a record $87.61, the cartel said.—AFP