Oil prices reach record high

Oil prices reached another record high today as persistent supply concerns saw the psychologically important 100 US-dollars-a-barrel level come back into view.

The cost of light, sweet crude for December delivery soared to 96.44 US dollars a barrel in European electronic trading on the New York Mercantile Exchange – an all-time trading high.

Oil prices later fell back to settle at just over 96 US dollars a barrel, but experts fear crude could soon hit 100 US dollars for the first time.

The cost of oil had eased to under 94 US dollars a barrel yesterday, however the pullback proved short-lived amid fresh supply worries.

US oil inventory figures due out tomorrow could potentially push prices higher, having seen crude jump more than four US-dollars-a-barrel last week on revealing a surprise drop for the second week in a row.

The market is expecting the US Energy Department to report that oil fell by around 1.6 million barrels last week.

The potential drop is largely thought to come after a recent suspension of output at Mexico’s state oil company Petroleos Mexicanos – one of America’s largest suppliers.

Tensions in the Middle East have added to concerns over global oil supply in recent weeks.

David Buik of Cantor Index said traders were taking advantage of uncertainties surrounding supply to help drive up oil prices, adding they could “easily” reach 100 US-dollars-a-barrel before the end of the week.

Crude prices are now within the range of inflation-adjusted highs set in early 1980.

While adjustment calculations vary, 38 US dollars a barrel then would now be worth between 96 to 103 US dollars or more today.