oil just hit $47 a barrel Insurgents threaten Iraq's main...

oil just hit $47 a barrel Insurgents threaten Iraq's main southern oil pipeline, analysts expect U.S. inventories to dip.
August 18, 2004: 6:35 AM EDT

NEW YORK (CNN/Money) - Oil prices topped $47 a barrel early Wednesday, setting yet another record, as violence in Iraq threatened to engulf the country's main export pipeline.

Analyst estimates that weekly data due later Wednesday will show a dip in inventories in the United States, the world's biggest oil consumer, also helped push prices to a new all-time high.

Before 6 a.m. ET, U.S. light crude reached the record $47.01 a barrel. At about 6:25 a.m. ET, light crude for September delivery was up 23 cents to $46.98, still above the prior intraday high of $46.95 set Tuesday.

London Brent rose 10 cents to $43.09, about $1 below the record high.

A group claiming ties to rebel cleric Moqtada al-Sadr claimed responsibility for an oil well on fire in Iraq, vowing to attack the country's main southern oil pipeline if U.S. forces refused to end its siege on the holy city of Najaf.

"We set ablaze an oil well in Amara. This is a simple warning to the government of (Prime Minister Iyad) Allawi and to occupation forces, that we will bomb the main south oil export line if they do not leave Najaf within 48 hours and end the siege," said an Internet statement dated Aug. 16 and signed by The Secret Action Group of The Imam Mehdi Army, Reuters reported.

The main southern pipeline has been closed for the most part since Aug. 9 due to sabotage, restricting export flows to about one million barrels daily, half normal supply rates.

Adding to the unrest, insurgents fired a mortar bomb in central Baghdad Wednesday near the venue where Iraqi leaders were meeting to select an interim national assembly.

Traders await inventory data from the U.S. Energy Information Administration to be released Wednesday morning in New York. A Reuters survey forecast a fall of 1 million barrels in commercial U.S. crude stocks, a prediction helping to bolster crude prices. In the previous week, crude stocks fell 1.9 million barrels to 298.6 million.

U.S. oil demand is up 3.5 percent so far this year, despite climbing prices, and overall U.S. consumer prices fell for the first time in eight months this July. Analysts say this indicates underlying inflation pressures are largely under control despite emerging signs in other major economies that rising energy costs are starting to take a toll.

U.S. oil has set all-time highs in all but one of the previous 13 trading sessions, and is nearly $10 a barrel, 26 percent higher, than at the end of June.