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Oil prices break through $93 mark Oil prices break through $93 mark
(about 3 hours later)
Oil prices have risen to yet another fresh high due to ongoing concerns over the situation between Turkey and Iraq, and general supply jitters. Oil prices have risen to fresh highs due to a combination of the weak dollar, supply concerns in Mexico and continued tensions in northern Iraq.
In early Asian trading on Monday, US light crude broke through $93 a barrel for the first time, hitting $93.20 before easing back slightly to $93.06.In early Asian trading on Monday, US light crude broke through $93 a barrel for the first time, hitting $93.20 before easing back slightly to $93.06.
London's Brent also hit a new high of $89.90 a barrel, up $1.21.London's Brent also hit a new high of $89.90 a barrel, up $1.21.
Oil prices have risen on fears Turkey may carry out an extensive ground assault against Kurdish rebels in Iraq. Some analysts believe oil prices will hit $100 a barrel before the end of 2007 if current pressures persist.
'Geopolitical tensions''Geopolitical tensions'
"What we see is a continuation of the trend that was in place on Friday," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney. An array of factors has forced prices up, analysts said.
"Geopolitical tensions, issues regarding tensions between Turkey and Kurdish rebels... those sort of factors have added to oil prices." In past months there also have been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran, and concerns over heating supplies for the US winter.
Analysts said prices had been further lifted by concerns that a tropical storm in the Caribbean could make its way to the US gulf coast, hitting key American oil facilities. It looks like everyone wants to sell the dollar and buy other assets Christoph Eibl, Tiberius Asset Management class="" href="/1/hi/business/7048600.stm">What is driving prices so high?
US light crude broke through the $92 a barrel price for the first time on Friday. At the same time, the US currency has fallen to a fresh low against the euro, making oil - which is priced in dollars - attractive to buy, analysts said.
Suggestions that the US Federal Reserve may cut interest rates further when it meets later this week has further hit confidence in the dollar and pushed money towards oil.
"It looks like everyone wants to sell the dollar and buy other assets, whatever assets whether they be equities or commodities," said Christoph Eibl, head of trading at Tiberius Asset Management.
In recent days, prices have spiked further on worries about disruption to a fifth of Mexican oil output following a tropical storm in the Caribbean.
Earlier in the month, prices were driven by fears that Turkey may carry out an extensive ground assault against Kurdish rebels in Iraq.
US light crude broke through the $92 a barrel price for the first time on Friday and prices have now risen 30% since the start of August.
Opec action
Efforts by producers' group Opec to restrain prices by agreeing to lift production from 1 November have so far failed to calm the market.
Taking inflation into account, prices are still below the peak of $101 a barrel seen in 1980.
But analysts are now bracing themselves for oil to approach the nominal $100 mark in the next few weeks should current conditions continue.
"I personally don't believe we will see prices at $100 a barrel but it is not impossible given the situation," said David Moore, a commodity strategist at the Commonwealth Bank of Australia.