Oil prices have risen to yet another record after unexpected falls in supplies of US crude stockpiles stoked fears of winter shortages.

US crude for December jumped to a record-peak of $92.22 a barrel in early European trade, while London Brent also hit a fresh all-time high of $89.30. The increase means that oil has climbed about 50 per cent since the start of the year.

But US crude is still below the inflation-adjusted $101.70 high in April 1980, a year after the Iranian revolution.

US crude oil stocks unexpectedly fell by 5.3 million barrels last week. Tensions in the Middle East and a record low dollar also helped fuel the oil price climb. The weak dollar fuels oil buying as investors view dollar assets as relatively cheap. “The market is founded on fear and supply-side concerns,” said an analyst at National Australia Bank, told Reuters. “The US moves on Iran and continued worries of supply are the factors now."

Fears of a supply crunch have been underlined this week by producer cartel OPEC. Abdullah al-Badri, OPEC’s Secretary General, said world oil markets were well supplied, while dollar weakness and a flood of speculative investment had helped push prices up to record levels.

Energy officials from OPEC nations Venezuela and Algeria have also poured cold water on hopes that OPEC would raise supply when it meets informally in Saudi Arabia next month. “The high prices are not coming from a lack of production,” Chakib Khelil, the Algerian Energy Minister, said.

OPEC has already agreed to boost production by 500,000 barrels per day (bpd) from November 1, but the United States has called on the group to increase output further.

David Fyfe, supply analyst at the Paris-based International Energy Agency, today echoed the call, insisting that there would be yet more upwards pressure on crude prices unless OPEC upped production ahead of the seasonal pick-up in demand next month.

He said: "We need more oil from Opec to replenish stocks before the winter. It’s been relatively cold but the seasonal shift in demand doesn’t begin until November. It’s early days yet.

“We have expressed for some months, some concerns about market fundamentals for the winter if we do not get more supply from Opec over and above what they have already agreed.

“Without that, stocks could tighten further.”

The AA gave warning that motorists faced yet more pain at the petrol pump as it revealed unleaded is averaging 98.39p per litre across the UK, just below the record of 98.5p. Diesel is averaging an all-time high of 100.9p per litre.

Yesterday, Shell's finance director, Peter Voser, became the first Western oil company executive to agree that political tensions and speculation were behind the soaring oil price.

Mr Voser said: “We find it hard to explain oil at $100 a barrel. I don’t see anyone queuing for fuel and nor are there any physical shortages. The price seems to be driven by some speculation and also has a political premium in it, rather than actually some of the fundamental drivers."

Rising crude oil demand across the world, especially from leading consumers the United States and China, has driven oil’s current rally. Investment funds have also been buying oil and other commodities, seeking respite from turbulent financial markets.

The soaring oil price and plummeting dollar will put renewed pressure on the Federal Reserve to cut interest rates next week.

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