US oil prices struck a fresh record high above $44 a barrel today, on continuing concerns that any hiccup in the tightly stretched supply chain could lead to a major disruption to global crude flows.
US light crude struck $44.25 a barrel, 10 cents up from Tuesday's settlement and the highest since oil futures were launched on the New York Mercantile Exchange in 1983.
Oil's latest boost to record levels was triggered when the head of the OPEC producers' cartel said there was no spare oil immediately available to cool red-hot prices.
Fears of a major glitch in the supply chain at a time when global oil demand is growing at the fastest pace in more than two decades were heightened by attacks on an oil pipeline in Iraq.
Saboteurs blew up an oil pipeline that supplies Iraq's main refinery and feeds in to the main northern export line, itself already closed for two months.
Iraqi exports of about 1.8 million barrels per day (bpd) were severely disrupted in May and June due to sabotage on key pipelines in the south of the country feeding the main oil terminal Basra.
The relentless rise in oil prices has heightened concerns about economic growth. The US government said yesterday that high energy prices helped push consumer spending to its biggest fall in nearly three years in June as shoppers cut back sharply on car purchases. The data triggered a slide on Wall Street.
Most Asian stock markets also fell today, weighed down by fears of the impact of high oil prices on corporate profit growth.
Oil prices have risen by more than one-third since the end of 2003 on worries that accelerating global demand has left supplies tightly stretched with little leeway for disruption.
The Organisation of the Petroleum Exporting Countries, excluding Iraq, lifted output in July to near the highest level in 25 years at 27.57 million bpd as record-high prices enabled members to pump at just about full tilt, a Reuters survey showed.
Saudi Arabia, which made up most of the July increase, has said it would produce 9.5 million bpd in August, just one million bpd below the country's full capacity.
Oil traders are also nervous that strong demand is preventing global stocks from building ahead of peak winter demand.