Oil prices surged to a record closing high in New York overnight as traders viewed the small output hike agreed by OPEC as a token gesture that would do little to meet rising global demand.
New York's main futures contract, light sweet crude for delivery in October climbed 74 US cents to a record close of $US78.23 per barrel, close to its all-time intraday high of $US78.77 from August 1.
In London, the price of Brent North Sea crude for October delivery rose 90 US cents to settle at $US76.38 per barrel.
The market action came as the Organisation of the Petroleum Exporting Countries (OPEC) agreed to raise quotas to allow an extra 500,000 barrels of oil a day, in an apparent victory for Saudi Arabia over its reluctant partners.
Analysts said this was a largely symbolic move that would be unlikely to lower prices significantly.
"The market took what OPEC did as only a token gesture," said Mike Fitzpatrick, at MF Global.
"We have very strong demand. Supply is dwindling until the year-end while demand will go even higher and (pressures are rising from) continued geopolitical unrest."
He added: "Since OPEC is already producing above the official ceiling this is really no change and is unlikely to add a significant quantity to the market. Rather, it will be seen only as a political gesture to appease consuming nations." © 2007 Australian Broadcasting Corporation
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