Oil extends record high, edges toward $90
Oil rose over half a dollar to its third consecutive record high on Tuesday, extending the previous day's 3% rally amid fund buying triggered by tension between Turkey and Iraq and anxiety over winter supply.
US crude rose 59 cents to $86.72 a barrel at 0527 GMT, just off an intraday high of $86.79 and the sixth straight session of gains after climbing $2.44 on Monday.
London Brent crude rose to $83.09, the first time it has traded above $83.
"It's the follow-up of Monday's move. This week is bullish on Iraq and the dollar is weak, which is attracting investors to commodities and oil futures," a Singapore-based trader said.
The latest flurry of buying extends the market's rise from below $70 in mid-August, a rally fuelled by the record lows in the US dollar, sturdy world energy demand growth and tight consumer nation inventories heading into the winter.
A possible Turkish military attack against Kurdish separatists in Iraq has more recently spurred buying as dealers fear a possible disruption to regional oil exports.
The Turkish cabinet asked parliament on Monday for permission to launch the attack. Iraqi oil exports via Turkey have been sporadic since 2003, although Turkey is also now a major conduit for Caspian oil exports to the Mediterranean.
"It's mainly driven by the situation on the Turkey-Iraq border at the moment and the uncertainty that surrounds it," said Tobin Gorey, a commodities strategist at Australia's Commonwealth Bank. "The market is paying for that uncertainty now."
Oil's nearly $8 or 10% surge in just over a week has also been aided by additional fund buying across the commodities complex, partly as a hedge against a weaker dollar. Gold hit a 28-year high and platinum breached record levels.
Fuelling bullish sentiment, weather forecasters said a low-pressure system emerging from the Yucatan Peninsula in Mexico could develop into a tropical cyclone and threaten the oil infrastructure in the Bay of Campeche, which supplies about two-thirds of the country's output.
Distillate inventories in the US are expected to ease by 300,000 barrels for the week ended October 12 ahead of peak winter demand, a Reuters poll ahead of the release of the Energy Information Administration's weekly data showed.
Though oil prices have more than quadrupled since 2002 on the back of surging demand from developing economies, they remain below the inflation adjusted peak of around $90 a barrel struck after the Iranian revolution in 1979. - Reuters
US crude rose 59 cents to $86.72 a barrel at 0527 GMT, just off an intraday high of $86.79 and the sixth straight session of gains after climbing $2.44 on Monday.
London Brent crude rose to $83.09, the first time it has traded above $83.
"It's the follow-up of Monday's move. This week is bullish on Iraq and the dollar is weak, which is attracting investors to commodities and oil futures," a Singapore-based trader said.
The latest flurry of buying extends the market's rise from below $70 in mid-August, a rally fuelled by the record lows in the US dollar, sturdy world energy demand growth and tight consumer nation inventories heading into the winter.
A possible Turkish military attack against Kurdish separatists in Iraq has more recently spurred buying as dealers fear a possible disruption to regional oil exports.
The Turkish cabinet asked parliament on Monday for permission to launch the attack. Iraqi oil exports via Turkey have been sporadic since 2003, although Turkey is also now a major conduit for Caspian oil exports to the Mediterranean.
"It's mainly driven by the situation on the Turkey-Iraq border at the moment and the uncertainty that surrounds it," said Tobin Gorey, a commodities strategist at Australia's Commonwealth Bank. "The market is paying for that uncertainty now."
Oil's nearly $8 or 10% surge in just over a week has also been aided by additional fund buying across the commodities complex, partly as a hedge against a weaker dollar. Gold hit a 28-year high and platinum breached record levels.
Fuelling bullish sentiment, weather forecasters said a low-pressure system emerging from the Yucatan Peninsula in Mexico could develop into a tropical cyclone and threaten the oil infrastructure in the Bay of Campeche, which supplies about two-thirds of the country's output.
Distillate inventories in the US are expected to ease by 300,000 barrels for the week ended October 12 ahead of peak winter demand, a Reuters poll ahead of the release of the Energy Information Administration's weekly data showed.
Though oil prices have more than quadrupled since 2002 on the back of surging demand from developing economies, they remain below the inflation adjusted peak of around $90 a barrel struck after the Iranian revolution in 1979. - Reuters
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