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 That would counter a market perception in recent days that oil supplies are falling as demand is growing. Reports by the Energy Department, the International Energy Agency and the Organization of Petroleum Exporting Countries over the past week have all supported that belief, as have Turkey's plans to launch a cross-border attack into Iraq in search of Kurdish rebels. Traders are concerned any escalation in the conflict between the Kurds and Turkey will cut oil supplies from northern Iraq. Light, sweet crude for November delivery rose 40 cents to $88.02 a barrel on the New York Mercantile Exchange, after earlier matching the trading record of $88.20 a barrel set Tuesday.
Despite the gains, the price of oil is still below inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
Turkey's parliament was expected Wednesday to agree that the government can enter Iraq sometime over the next year. The government has said an offensive against the rebels in northern Iraq will not immediately follow the parliament's decision.
An incursion would threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan. While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing for the past two months, and in recent days was being shipped at a rate of nearly 500,000 barrels a day, Dow Jones Newswires reported.
Other energy futures followed oil higher. November gasoline rose 0.67 cent to $2.1804 a gallon on the Nymex, while November heating oil rose 0.21 cent to $2.3408 a gallon.
Natural gas futures rose 7.6 cents to $7.443 per 1,000 cubic feet on the Nymex.
In London, December Brent crude rose 26 cents to $83.81 a barrel on the ICE Futures exchange.
At the pump, gas prices moved higher overnight for the second straight day, a sign gasoline may finally be moving higher to keep up with rallying crude prices. The average national price of a gallon of gas rose 1.7 cent Wednesday to a national average of $2.776 a gallon, according to AAA and the Oil Price Information Service.
[Associated Press; by John Wilen]
Associated Press writers George Jahn in Vienna and Gillian Wong in Singapore contributed to this report.
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