Oil breaks through $50 barrier

Crude oil prices pushed past the psychologically important $50 per barrel mark today to an all-time high of $50.01 as the market stayed bullish on a slow post-Hurricane Ivan recovery in the Gulf of Mexico.

The new record was set in after-hours Asian trade on the New York Mercantile Exchange as continuing unrest in key producers Saudi Arabia, Iraq and Nigeria also weighed in.

The price of oil is up roughly 75% from a year ago, while the United States has lost more than 11 million barrels of oil production in the past two weeks, according to government data, with Gulf of Mexico output still down nearly 500,000 barrels a day.

With global oil demand roughly 82 million barrels a day, analysts say the amount of excess oil production available is only about 1%, leaving the industry a slim margin for error in the event of a prolonged supply interruption.

On Monday, the US Minerals Management Service reported that daily oil production in the Gulf of Mexico is 29% below normal at about 1.2 million barrels per day.

Eleven million barrels of oil, or 1.9% of annual production in the Gulf of Mexico, have been lost since September 13, when offshore producers began evacuating crews ahead of Ivan’s arrival.

Hurricane Ivan left a trail of destruction in the US and the Caribbean last week, killing 115 and forcing oil platforms in the Gulf of Mexico to shut down.