PETROLEUM Concerns about supply force crude oil prices to remain high

SINGAPORE (AP) -- Crude oil prices hovered near an all-time high of $49.40 today, reflecting concerns about supply in key producers and Hurricane Ivan's impact on oil rigs in the Gulf of Mexico.
Prices were strengthened by reports of clashes in Saudi Arabia between government forces and suspected Al-Qaida-linked militants and mortar attacks on the Iraqi Oil Ministry in Baghdad.
Crude prices reached $49.39 in after-hours trading, just a cent off the record set last month on the New York Mercantile Exchange -- and closer to the psychological milestone of $50 per barrel. Later they dipped to $49.20.
"We're so close, it wouldn't take a lot," said John Vautrain, vice president of Texas-based energy consultants Pervin and Gertz in Singapore.
"A lot of what you're seeing is a response to Hurricane Ivan," Vautrain said. The storm killed 115 people in the United States and the Caribbean last week and shut down oil platforms in the Gulf of Mexico.
"It did enough damage that production isn't up to normal. Under normal circumstances, it wouldn't do that much damage [to prices]. But now, if you lose 400,000 to half a million barrels per day, prices jump," he added.
Also today, the Organization of Petroleum Exporting Countries, or OPEC, admitted that its decision to boost production by a million barrels per day from November has failed to calm the market.