Oil prices hit new record high

The cost of oil has hit another record high. The price of a barrel of US crude soared to $55.67, passing the previous high of $55.50, due to fears over a potential shipping strike in Norway.

The prospect of disruption to supplies from the world’s third largest exporter led analysts to predict oil prices could surge to the next milestone of $60.

Experts said the latest hike was triggered by the situation in Norway, where ship-owners are threatening to stage a strike next month in a protest involving rig workers.

The action could disrupt Norway’s daily output of three million barrels of oil a day, compounding already short supplies in the run-up to winter.

Kevin Norrish, oil analyst at Barclays Capital, said that if the strike were to cut off all of Norway’s exports, the result would be “pretty serious”.

He said: “If it does go ahead, we are into 60 dollar territory without a shadow of a doubt. The market’s going to be very, very nervous about it indeed.”

Factors including continued unrest in Iraq and the impact of Hurricane Ivan on oil production have left crude in short supply in recent weeks.

Fears are now growing that winter demand for heating oil will push prices even higher.

Earlier this month economists said the sky-high levels were already having an impact on the economy and manufacturing, although at a lesser rate than during the 1970s.

Motorists have been feeling the pinch, with the cost of unleaded petrol on UK forecourts now at an average of 84.2p a litre, the AA reported.

The latest increase has brought prices even closer to the 85p-a-litre levels seen at the time of the pump protests in 2000. The cost of unleaded petrol has risen by nearly 6p since April.