US oil prices have hit fresh record highs on nagging concerns over supplies from Russia and Iraq and doubts over OPEC's ability to make up for any shortfalls.
US light crude rallied to $43.09 a barrel on Asian markets this morning, the highest in the 21-year history of crude oil trade on the New York exchange, before easing to $42.98, up 23 cents.
In London, Brent crude jumped 30 cents to $39.55 a barrel, just off 14-year peaks, after settling 28 cents lower.
Mr Timothy Evans, analyst at IFR Energy Services, said the market was still not convinced crude supplies from Yukos would flow indefinitely and was doubtful about Iraqi crude output.
Yukos has said the company could collapse by mid-August because of a freeze on its bank accounts and assets, adding that its rail shipments of oil, which make up a quarter of its total sales, could be affected soon.
The Iraqi oil minister said today the country's oil exports - limited to its southern terminals due to sabotage and infrastructure defects - would average between 1.7 million and 1.8 million barrels per day (bpd) next month, from 1.5 million in July.
OPEC is pumping at more than 95 percent of capacity, the highest for a quarter of a century, and analysts said it had little room to boost output during emergencies. Saudi Arabia is seen as the only OPEC producer with any spare capacity.
Crude oil shipments from all 11 OPEC producers fell 560,000 bpd in the four-week period ending August 7th as exports to the West slip from a peak in July. This could largely be due to falling demand for sour crudes, an oil shipping analyst said.