Oil continues record charge, prices top 93 dollars
NEW YORK (AFP) — Oil prices leapt to fresh historic highs Monday, breaching 93 dollars for the first time in New York on mounting concerns about tight energy supplies worldwide, analysts said.
Investors pushed up prices to new peaks as reports of Mexican production cutbacks buffeted the market, adding to ongoing concerns about tensions in the Middle East.
Also supporting oil prices was a weak dollar and OPEC's reluctance to increase output ahead of the northern hemisphere winter when demand for heating fuel, particularly in the United States, spikes.
"There are supply concerns around," CMC Markets trader Nas Nijjar said.
New York's main futures contract, light sweet crude for delivery in December, finished up 1.67 dollars at a record closing high of 93.53 dollars a barrel after hitting a record intraday high of 93.80 dollars.
In London, Brent North Sea crude for December delivery hit a record 90.49 dollars in intraday trading, before retreating to 1.63 dollars at 90.32 dollars a barrel.
Oil prices have rocketed by about 50 percent 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 dollars to reach outright as well as nominal highs, according to some economists' calculations. Market analysts said oil prices could well hit 100 dollars in the present environment.
"What we see (in Monday's trade) is a continuation of the trend that was in place Friday," said David Moore, a commodity strategist with the Commonwealth Bank of Australia.
"Geopolitical tensions, issues regarding tensions between Turkey and Kurdish rebels (in northern Iraq) ... those sort of factors have added to oil prices," he added.
Heightened tension between Turkey and Kurdish militants located in northern Iraq have fueled concerns that energy supplies from the Middle East -- where Iran's nuclear program has already triggered sanctions from Western nations -- could be disrupted.
"I wouldn't be surprised if in the very short term we see oil prices continue to move a little bit higher," Moore said.
"It is certainly possible they will move higher ... I personally don't believe we will see oil prices at 100 dollars but it is not impossible given the situation."
Also pushing up oil prices on Monday were reports that Mexico had cut some crude output because of a storm, said Dariusz Kowalczyk, a senior investment strategist with CFC Seymour.
Kowalczyk also predicted that prices were headed north given the prevailing conditions.
"I think pretty much at this point anything goes," he said.
The dollar's continued weakness was also bolstering oil prices given it is the currency of the market, driving producers to seek higher output levels to offset the currency's weakness.
