Oil hits new high over $82

Oil surged to a peak over $82 a barrel on Tuesday, the fifth record in as many trading days, as a US Federal Reserve decision to slash interest rates heightened concerns of a winter supply squeeze in the world''s top energy consumer.
The record rally in oil prices could lead Opec nations to consider another hike to production, just a week after the cartel agreed to boost output by 500,000 barrels per day to soothe consumer fears of a crunch. "If the high price lasts, say, more than 15 to 20 days, there would at least be consultations between ministers," an Opec source told Reuters.
US crude surged $1.81 to a record $82.38 a barrel at 1720 GMT in electronic trade after settling up 94 cents at $81.51 in the regular session. London Brent crude was up 61 cents at $77.59. The rally picked up steam after the US Federal Reserve agreed to cut benchmark interest rates by 50 basis points - more than some investors had expected - raising expectations the economy will weather the US credit crisis.
"Any thoughts of macroeconomic weakness eating into energy demand now appear to be obviated by the Fed''s move," said Mike Fitzpatrick, vice president at MF Global. Hurricane and other supply risks, shrinking US fuel inventories and fund flows into energy from poorly performing equity markets have fuelled a rally of more 30 percent in oil prices so far this year.
Experts are concerned that strong demand and lagging production could cause a winter supply squeeze. "The winter season will look remarkably tight," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas. "The Opec increase will fall short of the needs of the market come wintertime."
US crude oil supplies are running at their lowest level in eight months while inventories of gasoline are at their lowest since Hurricane Katrina knocked out several oil refineries on the Gulf coast in 2005.
Though crude prices have quadrupled since 2002, when adjusted for inflation the price is below the $90 peaks of the Iranian Revolution in 1979. Goldman Sachs on Monday forecast US oil prices would surge to $85 a barrel by the end of the year, up $13 from its previous forecast, and said crude could climb as high as $90 due to tight supplies. US oil supplies probably dropped again last week for the fourth straight week as imports shrank, said industry analysts polled by Reuters ahead of Wednesday''s government data.
Forecasts called for a 2 million-barrel draw in crude stocks, a 700,000-barrel decline in gasoline stocks and a 1.3 million-barrel build in distillates, which include heating oil, ahead of peak winter heating demand in the Northern Hemisphere.