Oil prices cross $53 a barrel

Washington: Oil prices crossed $53 a barrel yesterday, reaching a new high. Prices rose on concerns about winter fuel supplies in the United States, operational snags in the Gulf of Mexico and labour unrest in petroleum-rich Nigeria.

Light crude for November delivery surged 64cents to a new settlement high of $53.31 per barrel on the New York Mercantile Exchange, a rise of more than $3 per barrel from a week ago. In London, Brent crude for November delivery surged 81cents to $49.71 per barrel on the International Petroleum Exchange.

While oil prices are about 79 per cent higher than a year ago, they are $27 below the peak inflation-adjusted price reached in 1981, leading many economists to conclude that the United States, which is more energy efficient today, has the ability to absorb the increase without taking a big financial hit. Yesterday's oil-price rise came as the Nigerian government and labour union negotiators failed to reach an agreement on state-controlled fuel prices, setting the stage for a nationwide workers' strike on Monday.