Oil jumped to a record high above $81 a barrel this morning amid concerns of a winter supply squeeze in the the United States.
US light crude for October delivery rose 49 cents to $81.06 a barrel earlier this morning after touching a record peak of $81.24 and following a $1.47 jump yesterday.
London Brent crude for November rose 27 cents to $77.25 a barrel.
The US Federal Reserve looked set to trim rates by at least 25 basis points today to keep a credit crunch from pulling the economy into a recession, which analysts have feared could hamper oil demand.
Hurricane and other supply risks, together with falling US inventories and fund flows into energy from poorly performing equity markets, have fuelled the recent hike in oil prices, which have climbed 33 per cent this year.
Goldman Sachs yesterday forecast US oil prices would surge to $85 a barrel by the end of the year, up $13 from its previous forecast, and said crude could climb as high as $90 due to tight supplies.
Goldman Sachs called last week's decision by the Organization of Petroleum Exporting Countries to raise output by 500,000 barrels per day from November 1st "too little, too late".