Oil hits record $84

Matthew Robinson
Reuters
Saturday October 13, 2007

Oil hit a record above $84 a barrel on Friday on mounting tensions between Turkey and northern Iraq and lingering supply concerns ahead of the Northern Hemisphere winter.

U.S. crude settled up 61 cents at $83.69 a barrel, after trading up to a record $84.05 a barrel earlier. London Brent crude climbed 40 cents to $80.55 a barrel.

Though oil prices have quadrupled since 2002, when adjusted for inflation the price is still below the $90-a-barrel peaks at the time of the Iranian revolution in 1979.

Prices jumped after the Kurdistan Workers Party said it would move back into Turkey from northern Iraq and target the Turkish government, highlighting tensions in a region that pumps a third of the world's oil.

Iraq's oil exports through Turkey have been virtually idle since the U.S.-led invasion of Iraq in March 2003 due to sabotage attacks, and most of Iraq's oil is exported from the country's south.

The rising tensions added to worries of a supply crunch during the Northern Hemisphere winter after declines in U.S. and European fuel inventories.

The latest snapshot of oil supplies in top consumer the United States showed a 1.7 million barrel fall in crude oil stocks last week to the lowest level since January.

European oil stocks have also slimmed.

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