[Goldfisch]

Crude Oil Reaches Record on Norway Supply, China Demand Concern

Oct. 25 (Bloomberg) -- Crude oil rose to a record in New York on concern production in Norway, the world's third-biggest exporter, may be halted by a shipowners' strike, reducing supply as demand from China is increasing.

The Norwegian Shipowners Association said it would stage a lock-out next month that would halt oil and gas output. Chinese consumption may be higher than predicted after the government said Friday the economy grew 9.1 percent in the third quarter, faster than the 8.9 percent forecast in a Bloomberg survey.

``In this environment, these announcements are a red rag to the bulls,'' said David Thurtell, a commodity strategist at Commonwealth Bank of Australia.

Crude oil for December delivery rose as much as 40 cents, or 0.7 percent, to $55.57 a barrel on the New York Mercantile Exchange. That's the highest intraday price since the futures began trading in 1983. The contract was trading at $55.49 at 2:14 p.m. Singapore time, 85 percent higher than a year earlier.

Oil consumption in China, which last year surpassed Japan as the world's largest consumer of the fuel after the U.S., is expected to jump 15 percent to 6.3 million barrels a day this year, the International Energy Agency said this month.

``China's economy is more robust than a lot of people think even with a higher oil price,'' said Anthony Nunan, a manager of international petroleum business at Mitsubishi Corp. in Tokyo.

Rising Chinese consumption is adding to concerns about shortages of supplies amid disruptions to production in Norway, the U.S. and Iraq.

Norway

The Norwegian Shipowners Association, which includes companies with vessels serving the oil industry, has said it would stage a lock-out that would affect 94 of its ships.

The lock-out, which comes into force from midnight, Nov. 8, 2004, would shut oil and gas production within a week, the Association said in a statement on its Web site.

Norway, the world's third-biggest oil exporter, is pumping about 150,000 barrels less crude than planned each day because a three-month rig-worker conflict has halted drilling of new wells, the association said on Oct. 14.

Higher oil prices have prompted concern in some countries that inflation may accelerate and slow growth.

German Chancellor Gerhard Schroeder's government cut its 2005 growth forecast to 1.6 percent from 1.8 percent as record oil prices damp the export-driven recovery, a lawmaker from the ruling Social Democratic Party, who declined to be identified by name, said on Oct. 21. Germany is the world's No. 3 economy.

``People are worried about higher oil prices -- it's slowly dawning on people'' that economic growth may slow, Thurtell said.

Capacity

The Organization of Petroleum Exporting Countries is pumping oil near capacity to meet the biggest rise in demand for almost three decades. The group's 11 members produced 29.9 million barrels a day in September, up 710,000 barrels from August, the IEA said. OPEC pumps more than a third of the world's oil.

Daily oil production in the Gulf of Mexico was down by 426,172 barrels due to damage to rigs and pipelines from Hurricane Ivan, the U.S. Minerals Management Service said Friday.

Oil futures may rise for a seventh week in New York because of concern that U.S. heating oil stockpiles won't meet winter demand, a Bloomberg survey last week found.

Thirty-nine of 60 traders and analysts, or 65 percent, predicted a rise in oil futures this week, the second-biggest margin predicting a gain since the survey began seven months ago. Ten expected prices to fall and 11 said they will be little changed. A week ago, 52 percent said prices would rise.

Heating-oil inventories fell 1 percent to 49.5 million barrels in the week ended Oct. 15, leaving supplies 11 percent lower than last year, the U.S. Energy Department said Oct. 20.

Sabotage

Saboteurs attacked two Iraqi oil pipelines to Baghdad's Dora refinery, which processes about 110,000 barrels of oil per day, Reuters reported Oct. 23, citing oil security officials. Iraq, the Middle East's fifth-largest oil producer, is struggling to boost its output as attacks on its oil sites continue.

Iraq lost about $7 billion in oil income from attacks on oil pipelines and sites between July 2003 and October this year, al- Khaleej newspaper reported yesterday, citing the country's oil minister. Iraq pumps about 800,000 barrels of oil a day from its northern fields, Thamir al-Ghadhban said in an interview with the United Arab Emirates-based newspaper. Exports of crude through the north have been on and off because of sabotage, he said.

Oil prices are inflated by $10 a barrel because of concern about the availability of supplies and by $5 more because of different pricing for so-called heavy and light crude, Kuwait's oil minister Sheikh Ahmad Fahd al-Sabah said in an interview with al-Sharq newspaper.

Refiners favor light crude, which contains less sulfur, as it is easier to process and yields more, better quality products such as gasoline and jetfuel.

Kuwait would like to see crude oil priced between $35 and $37 a barrel and prices could fall to that level once concern eases about supplies, the minister told the Qatari newspaper.