Oil hits record above $92 on weak dollar
NEW YORK (Reuters) - Oil prices shot to an all-time high above $92 a barrel on Friday as the tumbling dollar and Nigerian output disruptions helped extend a rally that has
lifted prices nearly 30 percent since August.
Worries that supplies may come up short ahead of the Northern Hemisphere winter have fueled the rise, drawing a fresh wave of speculative money from investors.
U.S. crude settled up $1.40 at $91.86 a barrel, off the record $92.22 struck during electronic trading earlier.
Oil was closing in on its inflation-adjusted high of $101.70 seen over the course of April 1980, a year after the Iranian revolution and at the start of the Iran-Iraq war.
London Brent gained $1.21 to $88.69 a barrel.
"Fresh highs are now attracting fresh buying, especially following yesterday's violation of the futures highs just above the $90 level," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Prices jumped past $90 a barrel after a U.S. government report on Wednesday showed a sharp drop in crude stocks in the world's biggest energy consumer.
Oil got a boost on Friday after a rebel attack on a oil rig in OPEC-member Nigeria operated by Italian firm ENI shut 50,000 barrels per day of production.
Traders were also eyeing new U.S. sanctions against Iran, the No. 4 oil exporter, which is at odds with the U.N. Security Council over its nuclear program. Washington accuses Tehran's Revolutionary Guard of spreading weapons of mass destruction.
TUMBLING DOLLAR
Unprecedented weakness in the U.S. dollar has been another factor supporting dollar-denominated commodities.
In anticipation that the U.S. Federal Reserve may cut interest rates next week, the dollar hit record lows against the euro and a basket of currencies Friday.
Moves by central banks to cut interest rates and pump billions of dollars into financial markets to ease a credit crunch have added fuel to oil's rally.
Oil's drive to record highs has stirred concern from consumer governments, and the administration of President George W. Bush said Friday oil prices were "way too high."
But U.S. Vice President Dick Cheney said the nation's strategic oil stockpiles would not be used to reign in prices.
Analysts say the wider economic problems may be dragging down demand in the giant U.S. market, while there are some signs of a growth slowdown in China, the world's second largest consumer.
China's apparent oil demand grew at the slowest rate in 20 months in September, up just 0.3 percent from a year earlier.
Despite worries from big oil importers, members of the Organization of Petroleum Exporting Countries have said they are unlikely to hike production at a meeting next month in Saudi Arabia.
The cartel has agreed to increase output by 500,000 barrels per day starting November 1, and members insist prices are not being driven by a supply shortfall.
Data from Lloyd's Marine Intelligence Unit showed OPEC's oil exports, excluding Angola, jumped 1 million bpd in the first two weeks of October versus the last two weeks of September.
(Additional reporting by Richard Valdmanis in New York; Jane Merriman and Janet Mcbride in London)
http://news.yahoo.com/s/nm/20071026/bs_nm/markets_oil_dc
