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Last Updated: Wednesday, 31 October 2007, 21:24 GMT
Oil soars to touch $95 a barrel
Barrels of oil
A number of factors have lifted oil prices to $94 a barrel
Oil prices continued their upward ascent, touching $95 a barrel in late New York trade as crude inventories disappointed for the second week.

US light crude ended the trading session up $4.15 to $94.53 a barrel, while London Brent traded at $90.63 a barrel, up $3.19.

The US government's figures showed that domestic crude stocks fell by 3.9 million barrels last week.

Analysts had forecast an increase of 100,000 barrels.

"I am very surprised, the crude number is insanely bullish, it's a big drop, for the second week in a row," said Mike Wittner, global head of oil research at SocGen in London.

Volatile trade

The US is the world's biggest energy consumer and therefore, the state of its inventories is a key concern.

Over the course of Wednesday, prices rocketed by as much as $4 to $5 in highly volatile trade.

An array of factors have been driving oil prices higher.

Oil prices have risen as the sliding greenback makes oil, which is priced dollars, cheaper to buy outside the US.

The dollar hit its weakest levels against the pound since 1981 on Wednesday.

At the same time, oil investors have been casting a nervous eye on Turkey's threats to carry out a major military incursion into northern Iraq to attack Kurdish rebels.

In past months, there have also been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran and heating supplies for the US winter.

Mexico was forced to halt one-fifth of oil production at the start of the week by a tropical storm hitting its Caribbean coast, sparking further supply fears, but it now expects to resume full production by Wednesday.

Some analysts expect crude prices to hit $100 a barrel before the end of the year.

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