7TH LD: Oil tops $88 per barrel for 1st time ever in N.Y.
(EDS: UPDATING WITH MARKET CLOSING)
The benchmark crude oil futures contract soared past $88 line a barrel on Tuesday for the first time ever in New York de to growing expectations of tighter supply toward the winter, briefly reaching as high as $88.20.
The November contract for West Texas Intermediate crude oil settled at $87.61 a barrel, up $1.48 from the previous day, on the New York Mercantile Exchange, closing higher for a sixth trading day in a row.
Expectations of tighter supply grew on concerns about disruptions to oil supplies from the Middle East after a report that Turkey's parliament could authorize a large-scale military incursion into northern Iraq to crush Kurdish rebels, the analysts said.
Another contributing factor was an Organization of Petroleum Exporting Countries report that global oil demand will increase while non-OPEC oil production will decrease, they said.
Soaring oil prices may increase inflationary concerns and become a destabilizing factor for the global economy, with the U.S. economy still surrounded by uncertainties due in part to lingering subprime mortgage troubles.
Oil may surpass $90 ''by the end of the week,'' said a senior official at a U.S. commodities futures firm.
Meanwhile, a U.S. energy analyst said the ongoing surge of oil prices stems largely from strong buying by speculators, indicating the oil market could tumble should such funds move away from the market at a stroke.
On Monday, the November contract briefly reached $86.71 a barrel and then settled at $86.13, up $2.44 from the day before.
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|Publication:||Japan Energy Scan|
|Date:||Oct 20, 2007|
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