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Oil prices broke above US$100 a barrel for the first time on Thursday, after a US government report showed a steep slide in crude inventories in the world's biggest energy consumer.
The surge in oil prices into the triple digits has darkened the economic outlook in the United
States, already battered by a housing crisis and credit crunch, and could threaten growth in big European energy-consuming nations.
"Oil prices have been increasing significantly. Now if this high level of prices is maintained then it will have an impact on the economy," European Commission spokeswoman Amelia Torres told a news briefing.
US crude climbed 47 cents to a record $100.09 a barrel - breaking Wednesday's $100 peak - before easing back to $99.63 by 1:47 p.m. EST. Brent crude rose 28 cents to $98.12 a barrel.
The price of crude is up more than 71 per cent from the same time a year ago, bolstered by thinning inventory levels, soaring demand from China and other developing countries, a weak US dollar, and geopolitical turmoil.
US President George W. Bush told Reuters in an interview Thursday that he was concerned about $100 oil, but saw no reason to tap the nation's emergency crude reserve.
Thursday's gains came after the US Energy Information Administration reported that commercial crude stockpiles fell 4.0 million barrels last week to the lowest level since January 2005.
Crude stocks in the United States have dropped more than 25 million barrels, or nearly 8 per cent, since early November as import flows slowed down and shipments were hindered by foul weather on the Gulf Coast.
Adding support, Mexico's main oil export ports remained shut Thursday after foul weather hit this week. Mexico is a top-three supplier of oil to the United States.
Thursday's gains added to a near 4 per cent gain on Wednesday that was triggered by violence in Nigeria's main oil port city, further threatening supplies from the world's eighth largest crude exporter.
Frequent attacks by militant groups since February 2006 have driven thousands of foreign oil workers from the oil-rich Niger Delta and cut oil exports by about 20 per cent.
COMMODITIES BINGE
Oil, which rose by 57 per cent in 2007, has scope to push even higher in 2008 along with other commodities, analysts said.
Gold and platinum also hit record highs on Thursday, bolstered by the weakness of the US dollar that has made dollar-denominated assets relatively cheap.
Despite oil rocketing to $100, the White House said it will not open up the nation's emergency crude reserves to ease prices.
The Paris-based International Energy Agency (IEA) also said it would not coordinate a release of emergency crude stocks from its 27 member states.
"We are not going to carry out (an emergency) oil stock release," William Ramsay, the IEA's deputy head, told Reuters.
"We don't respond to prices, and we don't see any disruption in the physical oil market."
Officials from the Organization of the Petroleum Exporting Countries, which decided at its last meeting in December to maintain output restrictions, said the group could do little to halt the rally.
- REUTERS
