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LEAD: Oil briefly hits new record of $90.07 in N.Y.

NEW YORK, Oct. 19 Kyodo


Oil prices set another all-time high of $90.07 a barrel in off-hours trading early Friday in New York on strong buying by speculators and the dollar's depreciation as well as rising tensions in the Middle East.

At 10:30 a.m., the November contract for West Texas Intermediate crude oil dropped $0.65 from the previous day to $88.82, on the New York Mercantile Exchange.

The key contract had surpassed the $90 threshold for the first time ever in off-hours deals on Thursday, reaching as high as $90.02. It settled at $89.47, up $2.07 from Wednesday, marking its closing high.

Oil prices have thus soared by more than 13 percent in the last 10 trading days, making it likely that they will hit $100 per barrel in the near future.

Ahead of the winter when demand for heating oil usually grows sharply in the northern hemisphere, the oil supply-demand position is becoming tighter.

Moreover, the dollar's descent against other major currencies has prompted speculators to actively participate in the oil market.

Meanwhile, Turkish troops' possible incursion into northern Iraq to crush Kurdish rebels amplified expectations for a tighter oil supply.

Earlier this week, Nigerian oil minister Odein Ajumogobia indicated the possibility of the Organization of Petroleum Exporting Countries raising oil output.

The dominant view, however, is that OPEC is unlikely to boost output substantially should it do so.
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Publication:Japan Energy Scan
Date:Oct 20, 2007
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