LONDON (MarketWatch) -- Oil futures rallied to a new record high on Friday, with worries about U.S. inventories and Middle Eastern tensions combining to send the benchmark energy contract past $92 a barrel.
Crude for December delivery rose as high as $92.22 a barrel in electronic trading, a day after the U.S. slapped new economic sanctions on Iran. The gains were also driven by worries about potential conflict between Turkey and the Kurds in the north of Iraq.
At 6:30 a.m. Eastern, crude had settled back a bit. It was up 89 cents to $91.35 a barrel.
Oil prices have been lifted by data, released Wednesday, showing a much higher-than-expected decline of 5.3 million barrels in crude supplies. Some believe the $100 a-barrel level is just around the corner.
"An unexpected drop in U.S. stockpiles has added to ongoing concern that supply from the Middle East may be disrupted," said analysts from Saxo Bank in Copenhagen on Friday.
Analysts at MF Global pointed out that neither the OPEC oil cartel, nor non-members such as Russia, seem in any hurry to increase production.
They noted that the consultant group Wood Mackenzie slashed its estimate of non-OPEC production growth in 2007 to 550,00 barrels a day from a million, due to disruptions at a North Sea pipeline.
Gold futures also rose to a 28-year high on Friday. Commodities across the board are getting a lift from expectations that further U.S. interest rate cuts could come as early as next week, and could fuel inflation.
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