Earlier in the week, oil futures set records over the past four days on concern that supplies from northern Iraq may be disrupted if Turkey takes military action against Kurdish rebels in northern Iraq.

Part of the reason is a weak dollar, which is pushing prices higher and enhancing the appeal of commodities as an investment. Analysts say it is hard to see how the trend is going to turn around in the short term.

Crude oil for November delivery rose to $90.07 a barrel in after-hours electronic trading on the New York Mercantile Exchange (NYMex), the highest since trading began in 1983. Prices were up 9 cents on the day at $89.56 in London. Brent crude oil for December settlement traded at $84.66 barrel, up 7 cents.

The Turkish parliament authorised prime minister Recep Tayyip Erdogan to order military incursions against Kurdish rebel bases in Iraq within a year. Iraq has said it will halt all oil exports through Turkey if it is attacked.

The US currency has fallen to a record low of $1.43 to the euro. A lower dollar makes oil cheaper in countries that use other currencies. While crude-oil is up 46 per cent in dollar terms so far this year, it is up just 35 per cent in euros, 40 per cent in British pounds sterling and 42 per cent in yen. Investors are going into crude futures to hedge against a weakening dollar.

The Organisation of Petroleum Exporting Countries (OPEC) agreed last month to produce an extra 500,000 barrels a day starting 1 November to meet rising demand. World oil consumption peaks in the fourth quarter, when refiners make heating fuel for the winter.

But analysts say additional output from OPEC won''t affect a market that is reacting to non-fundamental factors. They say the weakening US dollar is prompting investors to move funds to commodities futures from currencies.