Supply concerns send oil prices soaring above $82 a barrel

Mumbai: Oil prices rose above $82 a barrel, hitting a fresh record in Asian trade, after the Federal Reserve cut interest rates to boost the US economy.

US light-sweet crude for October delivery, New York`s main futures contract, was trading at a new all-time high of $82.32 a barrel at 0750 IST, up 81 cents from is previous close of $81.51.

Brent crude for November delivery gained as much as 81 cents, or 1 per cent, at $78.40 a barrel on the London-based ICE Futures Europe exchange. It was at $77.89 at 12:52 pm London time.

The spread between the US and European benchmark crudes grew to $3.9 9 today, the largest gap since December 29, 2004. US crude supplies are expected to decline while North Sea production rises, helping to widen the gap. Daily shipments of North Sea Brent crudes will rise 7.4 per cent to 47.5 million barrels next month, according to company loading schedules.

US crude-oil supplies are expected to have dropped 2.03 million barrels last week, the 10th decline in 11 weeks.

Analysts expect oil prices, which have already broken through a lot of strong technical resistance, to hit $85 a barrel.

Oil has risen 11 per cent so far in September, heading for its biggest monthly gain since January 2006. Royal Dutch Shell''s evacuation of staff from the Gulf of Mexico amidst concern a storm will strike production platforms, also affected market sentiment.

The dollar traded near a record low against the euro and fell versus the yen after the rate cut, lowering the cost of dollar-priced commodities for buyers paying in other currencies. Gold reached a 16-month peak and base metals such as copper, zinc and nickel also rose.