Oil prices near record high

Oil prices stood just a fraction off their recent record high today as disruption in Iraq and the effect of the hurricane season took their toll.

The cost of a barrel of crude hit $49.36 in electronic trading in New York, just slightly below the all-time high of $49.40 set in late August.

Analysts said the levels were “uncomfortably high”, although some questioned whether the price would break through the landmark $50 barrier.

In London, Brent crude was just below last week’s record level of $45.75.

The price of crude has risen sharply over the past week after it emerged that US stockpiles had fallen at a sharper rate than expected.

Extremely high demand and short supplies have been worsened by factors including disruption in Iraq, fuelling concerns over the amount of oil available to meet winter demand.

Hilary Cook of Barclays Stockbrokers said the cost of crude was “uncomfortably high”, but added that she expected it to cool off again rather than rise above $50.

She believed this was a “short-term hiccup” that had been caused partly by the impact of the weather.

Richard Slape, oil analyst at stockbroker Seymour Pierce, said continued disruption in Iraq and clashes in Saudi Arabia were among the factors that triggered the latest rally.

US oil prices had retreated from record levels in the past month but returned to current levels last week, following new data on US stockpiles.

Repeated attempts by oil cartel Opec to lift production and take the steam off oil prices have had limited success as demand in China and India continues to grow.