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Oil prices have risen to fresh highs due to a combination of the weak dollar,
supply concerns in Mexico and continued tensions in northern Iraq.
In early Asian trading on Monday, US light crude broke through $93 a barrel for
the first time, hitting $93.20 before easing back slightly to $93.06.
London's Brent also hit a new high of $89.90 a barrel, up $1.21.
Some analysts believe oil prices will hit $100 a barrel before the end of 2007
if current pressures persist.
'Geopolitical tensions'
An array of factors has forced prices up, analysts said.
In past months there also have been concerns about the stop-start violence in
Nigeria's main oil producing region, the international community's unresolved
nuclear dispute with Iran, and concerns over heating supplies for the US
winter.
It looks like everyone wants to sell the dollar and buy other assets
Christoph Eibl, Tiberius Asset Management
At the same time, the US currency has fallen to a fresh low against the euro,
making oil - which is priced in dollars - attractive to buy, analysts said.
Suggestions that the US Federal Reserve may cut interest rates further when it
meets later this week has further hit confidence in the dollar and pushed money
towards oil.
"It looks like everyone wants to sell the dollar and buy other assets, whatever
assets whether they be equities or commodities," said Christoph Eibl, head of
trading at Tiberius Asset Management.
In recent days, prices have spiked further on worries about disruption to a
fifth of Mexican oil output following a tropical storm in the Caribbean.
Earlier in the month, prices were driven by fears that Turkey may carry out an
extensive ground assault against Kurdish rebels in Iraq.
US light crude broke through the $92 a barrel price for the first time on
Friday and prices have now risen 30% since the start of August.
Opec action
Efforts by producers' group Opec to restrain prices by agreeing to lift
production from 1 November have so far failed to calm the market.
Taking inflation into account, prices are still below the peak of $101 a barrel
seen in 1980.
But analysts are now bracing themselves for oil to approach the nominal $100
mark in the next few weeks should current conditions continue.
"I personally don't believe we will see prices at $100 a barrel but it is not
impossible given the situation," said David Moore, a commodity strategist at
the Commonwealth Bank of Australia.
Posted: 2007824@507.66
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stranger
Oil prices will hit $100 and above in 2008.