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NEW YORK - Oil prices shot to an all-time high above US$92 a barrel overnight as the tumbling dollar and Nigerian output disruptions helped extend a rally that has lifted prices nearly 30 per cent since August.
Worries that supplies may come up short ahead of the Northern
Hemisphere winter have fuelled the rise, drawing a fresh wave of speculative money from investors.
US crude rose 61 cents to US$91.07 a barrel by 6:45 p.m. BST, off the record US$92.22 struck during electronic trading earlier. Oil is closing in on its inflation-adjusted high of US$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 62 cents to US$88.10 a barrel.
"Fresh highs are now attracting fresh buying, especially following yesterday's violation of the futures highs just above the US$90 level," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Prices jumped past US$90 a barrel after a US 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 US sanctions against Iran, the No. 4 oil exporter, which is add odds with the UN Security Council over its nuclear program. Washington accuses Tehran's Revolutionary Guard of spreading weapons of mass destruction.
Unprecedented weakness in the US dollar has been another factor supporting dollar-denominated commodities.
In anticipation that the US 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".
Analysts say the wider economic problems may be dragging down demand in the giant US 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 per cent 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.
- REUTERS