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Oil hits new high above $81

LONDON: Oil struck an all-time high above $81 a barrel on Tuesday, fuelled by concerns of a winter supply squeeze in top consumer the United States, where an anticipated interest rate cut was calming recession fears. Hurricane and other supply risks, tightening US fuel inventories and fund flows into energy from poorly performing equity markets have driven a rally that has taken US crude to new record highs for five straight trading sessions. US crude was up 2 cents at $80.59 a barrel after hitting a record $81.24 and following a $1.47 jump on Monday. London Brent crude was off 26 cents at $76.72. Though crude prices have quadrupled since 2002, when adjusted for inflation the price is below the $90 peaks of the Iranian Revolution in 1979. Goldman Sachs on Monday forecast US oil prices would surge to $85 a barrel by the end of the year, up $13 from its previous forecast, and said crude could climb as high as $90 due to tight supplies. US crude oil supplies probably dropped last week for the fourth straight week as imports shrank further, said industry analysts polled by Reuters ahead of Wednesday’s government data . Forecasts called for a two million-barrel draw in crude stocks, a 500,000-barrel decline in gasoline stocks and a 1.2 million-barrel build in distillates, which include heating oil, ahead of peak winter heating demand in the northern hemisphere. reuters

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