NY oil prices at record high

New York's main futures contract, light sweet crude for delivery in October, jumped 42 cents to end at 81.


93 dollars a barrel after the US Department of Energy (DoE) published its weekly report on energy stockpiles.

In London, the price of Brent North Sea crude for November delivery rose 88 cents to settle at 78.47 dollars per barrel, just shy of its all-time high of 78.64 dollars in August 2006.

The DoE said that US crude inventories plunged by 3.8 million barrels to 318.8 million barrels in the week ending September 14.

That marked the 10th consecutive weekly drop and was almost double analysts' consensus forecasts for a fall of about 2.0 million barrels.

Prices were "led by the (US) crude inventories," said AG Edwards analyst Eric Wittenauer.

US gasoline stockpiles rose by 400,000 barrels last week, confounding market expectations for a drop of 1.0 million.

In recent days, oil prices in New York have streaked to record highs on concerns about tight global supplies and rising demand.

Traders are fearful of a supply crunch in the fourth quarter of 2007 as heating fuel demand hits a peak during the cold northern hemisphere winter months.

Interest rates slashed

New York crude had surged past 82 dollars per barrel after the US Federal Reserve slashed interest rates by a half point to boost the flagging United States economy — which is the biggest global market for crude oil.

Oil market traders have said an economic slowdown in the United States could dampen crude demand and lead to lower prices, but traders are shrugging off this theory now.

Analysts at US investment bank Goldman Sachs have said oil could soar as high as 90 dollars a barrel between now and the end of the year and could reach 95 dollars by the end of 2008.

Industry analysts argue that a recent OPEC decision to boost output by 500,000 barrels a day was insufficient and came too late to meet rising winter-related demand.