Oil soars to record close at $104*

 From correspondents in New York

November 03, 2007 07:46am
Article from: Agence France-Presse

OIL prices shot to record closing highs today on concern about the weak
dollar and tight global energy supplies heading into the northern
hemisphere winter.

A stronger than expected US labour report for October, when the economy
added 166,000 jobs, also boosted sentiment, suggesting that demand for
energy would remain brisk as US economic momentum appears healthy.

New York's main oil futures contract, light sweet crude for delivery in
December, soared $US4.40 to a record closing high of $US95.93 ($104) a
barrel.

Yesterday a barrel of light sweet crude soared to $US96.05, close to its
absolute record of $US96.24 struck the day before.

In London today, Brent North Sea crude for December delivery breached
the $US92 level for the first time, settling $US2.36 higher at $US92.08
a barrel.

"It is clear that the market has $US100 a barrel in its sights and this
landmark is set to be breached before year-end," said Bank of Ireland
analyst Paul Harris.

Traders took heart from the US jobs report.

"The employment data is a stark reminder that the economy is a long way
from recession," said Dick Green, an analyst at Briefing.com.

Earlier this week oil prices soared to dizzying heights on news of
tumbling crude reserves in the United States, the world's biggest energy
consumer.

The market was also roiled by geopolitical tensions between Turkey and
crude producer Iraq.

Since the start of October, New York crude has gained approximately
$US13 in value and London Brent about $US12.

But prices ended yesterday with losses as traders took profits - and
tracked plunging global stock markets amid renewed worries over the
extent of the US subprime or high-risk mortgage crisis.

"Oil was up (today, Friday) after yesterday's subprime-related sell
off," said Michael Davies at the Sucden brokerage in London.

"One other factor probably helping crude today is the weaker dollar,
which makes crude relatively cheaper for foreign buyers," he said.

"The dollar has been under considerable pressure because of the weak US
economic outlook, which has persuaded the Fed to cut rates."

Today, the single currency soared to a record peak of $US1.4528, two
days after the Fed cut US interest rates by a quarter-point to 4.50 per
cent.

Oil futures had moved sharply higher on Wednesday after the US
Department of Energy revealed that crude inventories had slumped 3.9
million barrels in the week ending October 26.

The figures shocked the market because analysts' consensus forecast had
been for a modest gain of 400,000 barrels.

Industry experts are tracking global energy inventories because they
fear a supply crunch during the northern hemisphere winter months, when
demand for heating fuel hits a peak.

Oil prices have jumped by 50 per cent 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 $US100 to reach outright, as
well as nominal records, according to economists.

Today, OPEC's basket price of crude oil, based on production in 12
different countries, hit a record $US87.61, the cartel said.

The daily basket price jumped to $US87.61 yesterday from $US84.84 the
previous day, the Organisation of the Petroleum Exporting Countries said
in a statement.

The basket price is always published with a 24 hour delay and serves as
the reference price for the cartel's output policies.