Oil prices broke into fresh record territory above $52 on Thursday on heightened concerns that supplies of heating fuels will prove inadequate during the northern hemisphere winter. U.S. light crude futures rose 51 cents to a record $52.53 a barrel, marking a 60 percent surge in prices so far this year on the strongest demand growth in a generation that has cut the spare capacity cushion to cope with supply problems. London's Brent crude also struck a record peak, rising 46 cents to $48.45 a barrel . "We're in uncharted territory. There aren't many reasons to sell and there's lots of reasons to buy oil," said David Thurtell at Commonwealth Bank of Australia in Sydney. Consuming nations have so far been sanguine about the impact on economic growth, but some economic officials are beginning to admit concern.
A senior International Monetary Fund official warned on Thursday that tight oil supplies could leave the global economy worryingly vulnerable for years to come. David Robinson, deputy director of the IMF's research department, said the continuing rise in oil prices meant the fund's forecast of 4.3 percent global growth in 2005, published on Sept. 29, was already out of date and would probably be scaled back to around 4 percent if recalculated now. "I do worry about the medium-term outlook, about the sustained vulnerability to oil prices looking forward," he said.
LINGERING U.S. PRODUCTION OUTAGE
U.S. government data on Wednesday showed heating oil stocks fell 1.2 million barrels to 51.2 million barrels in the week to Oct. 1, leaving commercial tanks 6 percent lower than a year ago. Other major oil consumers in Europe and Asia also hold thin heating oil supplies. Inventories of heating fuels should normally rise at this time of year to cater for a surge in consumption in winter months. "We don't have enough inventories before winter when oil demand typically peaks," said Tony Nunan at Mitsubishi Corp. in Tokyo. Worries about a thin supply cushion have intensified after mid-September's Hurricane Ivan, which drove U.S. crude production to the lowest level since 1950 and disrupted operations at refineries along the Gulf Coast. About 478,000 barrels per day of crude output in the Gulf of Mexico, 28 percent of total gulf production, remains shut due to storm damage and industry executives estimate it could take 45-90 days to restore supplies from offshore platforms. The hurricane also disrupted operations at Gulf Coast refineries, where plants were still working at only 89 percent of capacity last week, cutting into heating fuel supplies. A senior OPEC delegate said the cartel stands ready to boost oil supplies still further, but with the cartel already pumping at a 25-year high, only top oil exporter Saudi Arabia has production to spare. Nigeria also remains a concern. Nigerian oil union NUPENG is threatening to disrupt production on Sunday ahead of a general strike on Monday, unless the government starts talks on retail fuel prices. Nigeria's oil unions have called strikes four times this year over rising fuel prices in the world's seventh largest exporter. So far none have affected output.///