Rate cut sends oil to fresh highs

Oil prices have risen by more than one third this year

Oil prices reached fresh highs above $82 a barrel after the US Federal Reserve cut interest rates and inventories fell more than expected.

The cut helped allay fears about a slowdown ahead of peak winter demand.

US light crude for October delivery set a new record high at $82.51 a barrel. It has since fallen back and at midday EDT (1700 BST) it was at $81.56.

US crude stocks fell by 3.8 million barrels last week, according to the Energy Information Administration.

The figure was almost double the expected fall.

London Brent Crude peaked at $78.65 a barrel, five cents below its record.

Oil prices have been rising gradually as a result of worries about supplies.

Some investors have also used commodities as an alternative option to volatile share markets.