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Oil prices break US$93

Oil leapt to a record high for a third day yesterday, surpassing US$93 as Mexico briefly halted one-fifth of its production and the US dollar struck new lows.

US crude, which hit a high of US$93.20 a barrel earlier, was up US$0.0102 at US$92.88 by 12:07 GMT. London Brent, which hit a record high US$90, was up US$0.89 at US$89.58.

Oil prices have soared by more than a third since mid-August as a stand-off between Turkey and Kurdish rebels, dollar weakness, easing interest rates and winter supply fears attracted a fresh wave of investment capital.

Prices were also partly driven up by a new tropical storm, dubbed Noel, in the Caribbean which investors fear may make its way to the US gulf coast where many of the country's energy facilities are located, dealers said.

Given the current situation, prices are likely to rise further and US$100 a barrel for oil cannot be ruled out, said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

"It is certainly possible they will move higher ... I personally don't believe we will see oil prices at a 100 dollars but it is not impossible given the situation," he said.

Prices rose yesterday after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day of oil output owing to bad weather in the Gulf of Mexico.

A spokesman said Pemex should be able to resume output immediately once the cold weather passed in two days. Mexico's three main export terminals were shut on Sunday.

OPEC has shrugged off calls from importer nations to raise output, saying politics and speculation -- not a supply shortfall -- are to blame.

"I haven't any signal that there is any shortage of crude ... I believe a big portion of the oil price today is related to geopolitics and fear factors, and we cannot solve it," Qatari Oil Minister Abdullah al-Attiyah told reporters in Doha.
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