*Oil prices hit record highs at $US83.32*

 From correspondents in New York

September 21, 2007 06:59am
Article from: Agence France-Presse

OIL prices powered to new record highs on global markets overnight, as
concerns about squeezed supplies were heightened by a storm threatening
Gulf of Mexico installations.

New York's main futures contract, light sweet crude for delivery in
October, jumped $US1.39 to close at $US83.32 a barrel.

The contract expired at the close.

In London, the price of Brent North Sea crude for November delivery
added 62 cents to settle at $US79.09 a barrel, after earlier hitting an
all-time high of $US79.28.

The price of New York crude has hit a series of record peaks in recent
days, including yesterday after the US Department of Energy (DoE) said
crude oil reserves had tumbled last week, underscoring global supply
tightness.

"The data reinforce concerns that, even if a slowdown in the US economy
trimmed domestic oil demand growth, supply constraints both upstream and
downstream might extend the recent tightening of (the oil market),"
Fimat analyst Antoine Halff said.

Further pressuring prices was a tropical storm building in the Gulf of
Mexico. According to the US government agency Mineral Management
Service, offshore oil and gas operators in the Gulf of Mexico have begun
evacuating platforms and rigs in the path of the storm.

The agency said roughly 28 per cent of oil production had been shut
down, accounting for about 360,000 barrels a day, as well as some 17 per
cent of gas production.

Iran's representative to OPEC agreed that $US100 oil was possible, but
did not say when.

"Yes, any outcome is possible. If the explosions in Mexico continue and
there is severe cold and if some nations in OPEC experience turbulent
political conditions and a lot of other issues can make the oil prices
go even higher," Hossein Kazempour Ardebili told Iranian radio.

Reinforcing supply concerns, the DoE said yesterday 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.

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

Distillates, which include diesel and heating fuel, advanced by 1.5
million barrels, which tallied with forecasts for a 1.23-million-barrel
gain.

"We have the usual mix of factors - weather, geopolitics and current
tightness in supply supporting prices," said Victor Shum, a
Singapore-based analyst with energy consultancy Purvin and Gertz.

"In the near term, there is limited downside risks to the oil market.
We've got really strong oil market fundamentals and many investors have
returned to the market because of these fundamentals."

Meanwhile's the Federal Reserve's decision yesterday to cut key interest
rates by a bigger-than-expected 50 basis points to ease tight credit
that has been causing turmoil on global financial markets also perked up
the oil market.

"The feeling is that if US economic growth remains healthy, oil demand
will also remain good," Mr Shum said.