Oil prices rise to another record high

October 09, 2004|Associated Press

Oil prices held above $53 a barrel yesterday, setting a record, on lingering concerns about winter fuel supplies in the United States, operational snags in the Gulf of Mexico, and labor strife in petroleum-rich Nigeria.

Light crude for November delivery surged 64 cents to a settlement high of $53.31 per barrel on the New York Mercantile Exchange, a rise of more than $3 per barrel from a week ago.

"Until we reach price levels where an economic slowdown is inevitable, that means we haven't reached the high yet," said James Cordier, head trader at Liberty Trading Group Inc. of Tampa, Fla.

Cordier believes "we're getting close" to the price where the global demand for oil could begin to taper, "and at that point you could have quite a correction."

While oil prices are about 79 percent higher than a year ago, they are $27 below the peak inflation-adjusted price reached in 1981, leading many economists to say that the nation, which is more energy efficient today, has the ability to absorb the increase without taking a big financial hit.