KEY POINTS:
Oil roared to a new record this morning (NZT) over US$90, as tight inventories sent prices up more than 3 percent.
US crude rose US$2.90 to US$90.00 a barrel at 1755 GMT, adding to Wednesday's nearly US$2-gain and bringing oil close to the US$90.07 peak it reached last Friday. London Brent was up US$2.55 at US$86.92.
The rally came as energy officials from Opec nations Venezuela and Algeria said Thursday that the producer group won't boost output when it meets informally in Saudi Arabia next month.
"The high prices are not coming from a lack of production," Algerian Energy Minister Chakib Khelil said.
Opec has already agreed to boost production by 500,000 barrels per day from Nov. 1, but major consumer nations have called on the group to further increase output.
WINTER CRUNCH?
Markets began their most recent surge on Wednesday after US government data showed a much larger-than-expected 5.3 million barrel draw in crude stocks of the world's top consumer.
"I think this is a continuation of yesterday's rally off the surprisingly bullish inventory release," said Eric Wittenauer at A.G. Edwards.
"One of the arguments being made in the recent rally was inventories are tight heading into winter months."
Traders were also watching Washington's decision on Thursday to designate Opec member Iran's Revolutionary Guard Corps a proliferater of weapons of mass destruction and its elite Qods force a supporter of terrorism.
Supply concerns, unprecedented dollar weakness and a shift of investor money into energy and commodities from other asset classes have also boosted the market, helping to push prices up roughly 45 per cent this year.
Prices more than quadrupled since the start of 2002.
Gains have been limited only by concerns a US housing slump could draw the economy into recession and limit demand.
Opec's secretary general repeated on Thursday there was no shortage of oil and added the weakening dollar was damping the windfall from record high prices.
"There is a lot of oil in the market," Abdullah al-Badri told reporters in Beijing.
"It is not really a bonanza for us, US$90 a barrel."
- REUTERS
