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Oil hits new record over $82

business Updated: Sep 19, 2007 09:46 IST
Oil hits new record over $82

Oil prices topped $82 on Wednesday, soaring to a fresh record in Asian trade after the Federal Reserve cut interest rates to boost the US economy.

At 0750 IST, New York's main futures contract, lightsweet crude for October delivery, was trading at new all-time high of $82.32 a barrel, up 81 cents from is close of $81.51 in late US trades on Tuesday.

Brent North Sea crude for November delivery was 79 cents higher at $78.38 a barrel.

"We are in a new territory for oil-pricing, said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Getz.

Tony Nunan, manager for energy risk management at Mitsubishi Corp in Tokyo, said the USD 85 mark was now within striking distance.

"Prices have broken through a lot of strong technical resistance already. I assume USD 85 is a round number that the market is targetting," he said.

He said the half-point cut in key rates by the US Federal Reserve was aimed at calming fears of a slowdown in the US economy, which has been grappling with a crisis in the subprime housing loan market.

"It's a pretty big boost to the equity markets and it's calming the fears about a slowing economy. It is also providing more fuel to the fire in the oil markets," Nunan said.

The US rates reduction is expected to cushion the impact on the general economy of a credit crunch sparked by the subprime crisis. The fear is that an economic slump in the United States, the world's biggest energy consumer, will dent demand for oil.