New York oil leaps to new record above 80 dollars
NEW YORK (AFP) — Oil surged to fresh record highs above 80 dollars a barrel in New York Monday amid concerns about tight crude supplies with no real relief in sight, analysts said.
New York's main futures contract, light sweet crude for delivery in October, jumped 1.47 dollars to close at a record 80.57 dollars per barrel. Earlier, the price had climbed to an all-time high of 80.70 dollars.
In London on Monday, the price of Brent North Sea crude for November delivery gained 76 cents to settle at 76.98 dollars per barrel.
The New York contract has been on a record-setting streak since breaching the 80-dollar barrier last Wednesday, driven by investor worries that crude supplies are inadequate to meet demand as winter approaches in the United States and other countries in the northern hemisphere.
The concerns spiked after the US Department of Energy reported Wednesday that US crude inventories fell by a sharper-than-expected 7.1 million barrels in the week ended September 7. The drop was almost three times steeper than market expectations.
The news compounded concerns over tight global energy supplies despite OPEC's move to hike output earlier in the week.
The closure of several US refineries in the path of Hurricane Humberto also pressured prices late last week.
The Organization of the Petroleum Exporting Countries' announcement last Tuesday that it would pump an extra 500,000 barrels of oil per day from November has provided little comfort to the stretched market, analysts said.
"We believe that this will be too little, too late, barring an outright collapse in demand, and now expect inventories to draw to critical levels this winter," Goldman Sachs analysts wrote.
The Centre for Global Energy Studies said Monday in its latest monthly report that unless OPEC "puts enough oil onto the market at prices that attract buyers the world will remain short of oil and prices will continue to rise in the short term."
The Goldman Sachs analysts said they were raising their year-end 2007 price forecast to 85 dollars per barrel, from 72 dollars, "with a high risk of a spike above 90 dollars per barrel."
They unveiled a 2008 average price forecast of 85 dollars per barrel, with a year-end price target of 95 dollars.
Investors appeared to ignore 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.
The IEA, which acts as an energy policy adviser to industrialized countries, revised lower its last month's demand forecast to 85.9 million barrels per day in 2007, from 86.0, and to 88 million bpd in 2008, from 88.2 million.
