Crude oil rose above $97 a barrel in New York to a record as a storm forecast to produce 36-foot waves in the North Sea forced BP Plc and ConocoPhillips to evacuate workers and cut production.
Conoco and BP said they have started evacuating workers from some facilities before the weather worsens. The North Sea produced 4.4 million barrels of oil a day last year, more than OPEC member Iran. An Energy Department report tomorrow will probably show crude-oil supplies fell 1.5 million barrels last week, according to a Bloomberg News survey.
``All indications point to inventories falling yet again,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut. ``Overnight the dollar against the euro and the attack on the pipeline in Yemen was a reminder of how precarious supplies are. Now there are evacuations of North Sea platforms, just what we don't need.''
Crude oil for December delivery rose $2.72, or 2.9 percent, to settle at $96.70 a barrel at 2:46 p.m. on the New York Mercantile Exchange. It was a record close. Futures climbed to $97.10, the highest intraday price since trading began in 1983.
Brent crude oil for December settlement rose $2.77, or 3.1 percent, to close at a record $93.26 a barrel on the London-based ICE Futures Europe exchange. Brent reached $93.56 a barrel, the highest since trading began in 1988.
Workers on ConocoPhillips' Ekofisk A, B and C platforms, as well as Eldfisk A and B, are being moved to land or to safer sites, said Kurt Mikkelsen, a ConocoPhillips spokesman. BP is moving 150 workers from its Valhall field and expects the platform's 80,000 barrel-a-day oil and gas output to stop late tomorrow, spokesman Jan Erik Geirmo said in an interview.
``Supply worries, geopolitical concerns and economic forces are all working to send prices higher,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``Anxiety over Pakistan, the bombing of a pipeline in Yemen and the falling dollar are all in focus today. There are expectations for a considerable decline in crude stocks.''
An oil pipeline in north-central Yemen was blown up by tribesmen, the Deutsche-Presse Agentur news service reported, citing unidentified police officials. Tribesmen have frequently attacked the pipeline and it wasn't immediately clear whether the attackers were linked to al-Qaeda militants, DPA said. There were no reports of casualties.
``The Yemen blast is a reminder that there should be a terror premium,'' said Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago. ``If it turns out that al-Qaeda was involved, prices will soar.''
Mexican oil production was reduced last week because of stormy weather. The country is the second-biggest supplier of oil to the U.S
``There's a lot of trading in anticipation of'' the inventory report, said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``Imports from Mexico were down by a great deal, which will be reflected in tomorrow's numbers.''
Heating oil for December delivery rose 6.39 cents, or 2.5 percent, to close at a record $2.6078 a gallon in New York. Futures touched $2.6198, the highest since trading began in 1978. Gasoline for December delivery rose 5.39 cents, or 2.3 percent, to close at $2.435 a gallon.
Pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 2 cents to $3.024 a gallon yesterday, AAA, the nation's largest motorist organization, said today on its Web site. Prices touched a record $3.227 a gallon on May 24.
The dollar fell to a record low against the euro on speculation financial-company losses from U.S. subprime-mortgage defaults will grow, prompting the Federal Reserve to cut interest rates for a third time this year. A falling dollar enhances the appeal of commodities as an investment.
Gold futures for December delivery rose $12.60, or 1.6 percent, to $823.40 an ounce on the Comex division of the New York Mercantile Exchange. The price climbed to the highest for a most-active contract since Jan. 21, 1980, the day gold reached a record $873.
``OPEC wants higher prices when the dollar falls,'' Flynn said. ``Also, when the dollar falls oil becomes relatively cheaper in Europe and other places. Prices may be higher there but they are seeing nothing like the increases here.''
In U.S. dollars, West Texas Intermediate, the New York- traded crude-oil benchmark, is up 58 percent so far this year. Oil is up 44 percent in euros, 49 percent in British pounds and 52 percent in yen.
Members of the Organization of Petroleum Exporting Countries have said a falling dollar justified higher prices they sell oil in dollars and often buy goods in euros.
``Chances are that we'll reach $100 but we probably won't stay there long,'' said Antoine Halff, the head of energy research at Fimat USA Inc. in New York. ``The fundamentals haven't tightened much since we were at $75. Prices should also come down because the Saudis are cutting prices to key customers.''
Saudi Aramco, the world's largest state oil company, cut its December official selling prices to the U.S. ( Bloomberg )