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U.S. Oil Hits $88, Brent at Record on Supply Fears | ASHARQ AL-AWSAT English Archive 2005 -2017
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SINGAPORE (Reuters) – U.S. oil prices surged to $88 a barrel and London Brent crude hit an all-time peak on Thursday, after a slide in U.S. oil stocks renewed fears of an energy crunch in the northern hemisphere’s peak winter heating season.

London Brent crude rose 73 cents to $85.10 at 0234 GMT, after touching a record high of $85.13 earlier on Thursday.

U.S. light crude for December delivery gained 85 cents to trade at $87.95 a barrel, up $3.23 a barrel from around the same time on Wednesday.

News that crude stocks in the world’s top oil consumer fell 5.3 million barrels last week, instead of an expected increase of 800,000 barrels, saw U.S. oil leap on Wednesday, ending three sessions of declines.

U.S. oil prices are up 44 percent this year but still below last week’s all-time peak of $90.07.

They have risen on fears that supply may fall short in the northern hemisphere’s winter season, tensions in the Middle East and from fund flows into energy from equity markets.

Their gains have been limited only by concerns that a U.S. housing slump could draw the economy into recession and limit future oil demand.

“That stocks fell was a huge surprise for us. Stocks are not adequate to supply all parts of the U.S. and Europe ahead of the winter season,” said Yusuke Seta at Fimat Japan Inc, adding that Brent crude had also risen on the back of the U.S. data.

“Now we’re again looking for a rise in U.S. futures.”

U.S. Energy Secretary Sam Bodman called on OPEC and other world oil producers to boost production to counter sagging inventory levels in the United States and other industrial nations.

OPEC members, who have already agreed to boost production by 500,000 barrels per day from November 1, will meet informally in Saudi Arabia next month.

A senior OPEC delegate said another OPEC output hike may be needed.

Adding to supply concerns, Mexico — one of the top exporters to the U.S. market — closed its main oil exporting ports on Tuesday due to bad weather. A storm killed 10 Mexican oil workers fleeing a battered offshore rig.

Closely-watched tensions between Iraq and Turkey over Kurdish rebels operating from the north of Iraq are also supporting oil prices.

Turkish warplanes attacked a village in northern Iraq on Wednesday, an Iraqi Kurdish security official said, but Turkey said it wanted to hold back from a major incursion to give diplomacy a chance.