Supply worries push oil price higher

Fears over winter supplies pushed crude oil prices closer to $100 a barrel today.

The cost of light, sweet crude for December delivery rose as high as $98.03 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract hit a high of $97.10 yesterday before closing at $96.70 a barrel, a record settlement.

The latest increase comes amid speculation that figures due later today from the US Energy Department's Energy Information Administration will show crude supplies dropped last week.

And news of an attack earlier this week on an oil pipeline in Yemen has added to supply concerns at the start of the winter.

The potential drop in oil inventories follows the recent suspension of output at Mexico's state oil company Petroleos Mexicanos - one of America's largest crude oil suppliers.

The weak US dollar, which fell to a new low against the euro today, is also lifting oil prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

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

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