Oil surged over $83 per barrel on Thursday in the seventh straight record-breaking session as companies shut Gulf of Mexico output on forecasts a tropical depression churning through the region would become a storm.
U.S. light, sweet crude gained $1.44 to $83.37 per barrel in mid-afternoon trade, after hitting an all-time high of $83.60 earlier.
London Brent crude rose 40 cents to $78.87.
Oil has traded above $80 for the past week in part due to concerns about U.S. supplies after government data showed crude stocks in the top consumer fell for the fourth consecutive week.A tropical depression blowing into the Gulf of Mexico exacerbated worries as companies shut offshore oil and natural gas output on expectations it would become a tropical storm.
Energy companies have shut over 360,100 barrels of oil per day, some 27.7 percent, of Gulf crude oil production and 16.7 percent of natural gas production on the storm threat, the U.S. Minerals Management Service said on Thursday.
"Energy companies shutting down Gulf of Mexico production and Fed Chief Bernanke's optimistic words on the economy were supportive for this latest record rise in crude futures," said Phil Flynn, analyst at Alaron Trading in Chicago.
Pressures On Prices
U.S. Federal Reserve Chairman Ben Bernanke said he expects rising defaults on U.S. mortgages but added the Fed was committed to preventing new lending problems after cutting interest rates sharply Tuesday.
Oil has risen by a third this year, driven by worries of fuel shortages during the Northern Hemisphere winter, supply risks in producer countries, the weaker dollar and rising money flows from investors.
The recent surge to record prices came after producer group OPEC agreed to add 500,000 barrels per day (bpd) to global markets to help calm consumer nation concerns.
While analysts are divided over whether prices can sustain current levels, some OPEC officials said oil will not stay above $80 for long.
"This situation is not stable and cannot be permanent," said Hossein Kazempour Ardebili, Iran's OPEC governor.
Wednesday's rise to record highs came after data showed crude oil stocks in the United States fell by 3.8 million barrels last week, nearly twice the 2-million-barrel draw expected in a Reuters poll of analysts.