USA: Oil prices continue their rise into record territory, inching towards the milestone figure of 100 dollars a barrel

Crude oil prices end above 93 dollars a barrel in New York trade, and some analysts say the 100 dollar a barrel milestone is not only 'inevitable', but reachable soon. U.S. crude oil futures ended sharply higher on Monday (October 29), rallying to a record high above $93 as Mexico's weather-curbed oil output, a weak dollar and geopolitical tensions combined to lift prices. On the New York Mercantile Exchange, December crude rose $1.67, or 1.82 percent, to settle at a record $93.53 per barrel, trading from $91.52 to an intraday record $93.80. In London, December Brent crude rose $1.63, or 1.84 percent, to settle at $90.32 a barrel. The dollar fell to record lows against the euro and a basket of major currencies on Monday for the second consecutive session as dealers bet the Federal Reserve will cut interest rates this week and signal more cuts to come. Ira Eckstein of Area International Trading said the weakness in the dollar is one of the main factors driving oil prices higher. "I think that the Europeans are buying oil since it's quoted in dollars at a discount, so they're able to buy oil cheap. That's what's also driving it higher. 100 dollar oil to us isn't 100 dollar oil to them," said Eckstein. Eckstein said reaching the 100 dollar a barrel milestone is not a question of if, but when. "It's inevitable. I think people like milestones, they like records, people want to drive it higher. I think that it's a nice number to get to, it's like a goal. I think we're going into the fourth quarter, the heavily usage of the year, and I think it's realistic. We're a couple of weeks away," said Eckstein. International tensioned also contributed to Monday's rise in prices. Helicopter gunships bombed Kurdish rebel positions in southeast Turkey on Monday as the government massed up to 100,000 troops along the Iraqi border in readiness for a possible large-scale incursion. Oil markets also eyed unrest in Nigeria, where six workers at an Italian oil facility were kidnapped last week. OPEC would be happy to raise output if needed but there was no sign yet of a supply shortage, Qatar's oil minister Abdullah bin Hamad al-Attiyah said on Monday.

ITN Source | October 30, 2007

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