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Oil hits new high over $82 on supply worries

Business Materials 20 September 2007 04:12 (UTC +04:00)

( Reuters ) - Oil struck a new record over $82 on Wednesday as falling U.S. inventories and the threat of a storm gathering near Florida renewed supply concerns in the world's biggest energy consumer.

U.S. oil settled up 42 cents at $81.93 a barrel, after hitting a record $82.51. London Brent crude gained 88 cents to $78.47 a barrel.

Prices have touched record highs for six consecutive trading days, supported by fears of a possible supply crunch during the Northern Hemisphere winter.

Government data showing a 3.8 million-barrel draw in U.S. crude oil stocks last week added to worries. It was nearly twice analyst forecasts and the fourth straight fall.

The market already was rallying after the U.S. Federal Reserve's interest rate cut raised expectations energy demand would remain robust.

"The crude draw being more than forecast would prove to be supportive in a complex that for weeks has eyed the inventory drawdown and the expected tightness in inventories going forward," said Eric Wittenauer of A. G. Edwards in St. Louis.

Oil's gains were supported by news several oil companies were evacuating nonessential workers from oil rigs in the Gulf of Mexico due to the threat of a storm.

The National Hurricane Center said a tropical disturbance near Florida was set to strengthen and lurch in the Gulf, home to a quarter of U.S. oil output, though computer forecast models showed shrinking chances of any impact.

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