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Oil prices climb to a new high.

Oil prices climbed to a new record yesterday after supply worries once more unsettled traders and left motorists facing further misery on the forecourt.

The cost of a barrel of oil in New York broke through the $52 a barrel mark for the first time after the market continued to react to recent production difficulties and the prospect of rising winter demand.

The latest hike comes a day after the RAC warned that the price of petrol was expected to rise to an average of 82p a litre ( 5p more than a year ago.

Problems in the Gulf of Mexico, due to the impact of Hurricane Ivan, have caused the biggest supply worries, although anxiety over developments in Nigeria and Iraq have also forced prices above $50 a barrel.

Speculators betting on the higher price of oil have also been blamed, while the market is increasingly worried about levels of winter demand.

The London stock market took the latest rise in its stride, gaining by as much as 26 points in early trade to stand at levels last seen more than two years ago.

The performance was driven by gains for oil giants BP and Shell.

One reason for the market's resilience was the news yesterday that UK interest rates are to stay on hold at 4.75pc.
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Publication:The Journal (Newcastle, England)
Date:Oct 8, 2004
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