Oil prices reached a new record level of nearly 88 dollars on Tuesday, building on a strong rise over the past few days during which a barrel increased by approximately eight dollars due to insufficient supplies, strong demand, and tensions in northern Iraq.
A barrel of crude oil on the U.S. market rose by 1.42 dollars to 87.55 dollars, down from a previously reached 87.97 dollars earlier in the day – a new record level. In the London market, the price of oil increased by 1.15 dollars to 83.9 dollars. Oil prices have been jumping from one record level to another over the past three days. Investors cite rising tensions between Turkey and Kurdish separatists in northern Iraq, strong growth in global oil demand, insufficient supplies in consumer countries ahead of winter, and an unprecedented weak dollar as reasons for their strengthening. “It is difficult at this moment to find any factor that would encourage a drop in prices.
The Iraqi-Turkish issue, the weak dollar, and the levels of U.S. heating oil stocks, which are significantly below levels a year ago,” said Tetsu Emori, fund manager at Japan’s Astmax Futures. A new report on U.S. distillate stocks, including heating oil, for the week ending October 12 is expected to show a decrease of 300,000 barrels, according to forecasts obtained from a Reuters survey. The latest purchases in the market were prompted by the possibility of a Turkish attack on Kurdish separatists in Iraq, as investors began to fear potential disruptions in regional oil supplies.
