US oil prices struck a new record peak climbing close to $44 a barrel after the United States raised its security alert to high for a possible al-Qaeda attack on a top financial institution.
Dealers said the increased security threat was boosting the market, which is already worried by possible sabotage strikes on oil infrastructure in the Middle East, at a time when producers are pumping close to full tilt to supply soaring oil demand.
US light crude hit a peak at $43.92 a barrel, marking a gain of 12 cents over Friday's settlement and the highest level reached since oil futures were launched on the New York Mercantile Exchange in 1983.
"The threat alert is bringing more confusion and uncertainty into the market," said Mr John Brady at ABN AMRO in New York.
Mr Tony Nunan, manager at Mitsubishi's international petroleum business in Tokyo, said a strike may ultimately bring prices down, as happened after the September 11, 2001 attacks.
US crude prices briefly spiked a couple of dollars close to $30 a barrel following those attacks but came crashing down to the low $20s soon after, along with financial markets.
"After 9/11 people were afraid and stopped travelling. They stopped consuming because of the uncertainty. If the target is in a consuming nation, you would expect an attack to affect the market to the downside," said Mr Nunan.
Oil's recent gains have been driven in part by concerns that financial turmoil at Yukos might cut exports from Russia, the world's second-biggest supplier. - (Reuters)
