Oil prices leapt to fresh records yesterday, as traders took fright at a series of new squeezes on global oil production ahead of winter in the northern hemisphere.
The benchmark Brent future breached $50 (€40.4) a barrel for the first time, reaching a high of $50.62, before settling at $50.03, up 32 cents in late London trade.
In New York, benchmark US crude futures peaked at $53.32 a barrel. The latest surge took prices, in real terms, to their 1990 level, when Iraq invaded Kuwait.
Global stock markets took the latest surge in oil prices calmly, but economists said there was concern about the outlook for inflation. Mr Joaquin Almunia, the EU monetary-affairs commissioner, said oil was a threat to the world economy. "The focus has hinted towards the likely impact of high prices on global growth and inflation," he said.
Mr Michael Deppler, director of the International Monetary Fund's European Department, said: "Everybody's oil price assumptions are being ratcheted upwards. \ is making people realise that the oil price rise is going to be more sustained."
Oil prices have climbed more than 60 per cent this year. The latest increase came as Nigerian oil workers began a four-day strike and on signs that US output may be affected for up to six months by recent hurricanes.
Sentiment was also hit by the intensification of industrial action on Norwegian oil rigs and by Venezuela's decision to increase royalty taxes paid by foreign oil companies on large energy projects. Hugo Chavez, Venezuela's president, cancelled a tax holiday for the Orinoco extra-heavy oil venture that is financed by ExxonMobil, ConocoPhilips and Total, along with state-owned PDVSA.
Economists say sustained high oil prices will hit corporate profits and consumer spending.
Heating-oil prices in Europe have risen 80 per cent this year, hitting a record high of $485.5 per tonne in London, prompting fears of record winter heating bills.
Sheikh Ahmad al-Fahd al- Sabah, the Kuwaiti oil minister, said that by December 10th, the next meeting of the oil cartel, he would back an increase of one million barrels per day in OPEC's output ceiling if oil prices stay at today's levels.
