Oil prices now at record high

NEW YORK — Oil prices soared to a record Thursday on the New York Mercantile Exchange, crossing $41 a barrel and settling at the highest point in the 21-year-history of crude futures trading in New York.

June light, sweet crude oil futures settled at $41.08, up 31 cents from Wednesday, after touching an intraday high of $41.10.

The previous high was $41.07 on October 11, 1990, in the run-up to the Persian Gulf War. That day, Brent blend crude oil futures settled at $41.15 on London’s International Petroleum Exchange.

On Thursday, June Brent gained 54 cents to settle at $38.49 a barrel on the IPE.

“There is a war or fear premium built into the price of crude oil,” said Ed Silliere, vice president of risk management at New York-based Energy Merchant Corp. “It seems that al Qaida is ready, willing and able to attack Saudi Arabia’s oil facilities and that fear is bringing speculators pouring into the Nymex.”

Silliere said the recent events in Iraq — which had clearly taken a turn for the worse — had compounded terrorism fears. A weekend attack curbed Iraqi production and on Tuesday, a videotape of an American being decapitated in Iraq was released.

Loss of oil production in Iraq, coupled with lower production in Nigeria and Venezuela, had worsened the situation, he said.

Nymex June gasoline futures also rose 2.7 cents to settle at $1.4005 a gallon, the highest-ever gasoline settlement price.

Tight gas supplies and the fear of insufficient supply in time for the summer driving season is leading to higher prices, Silliere said.

Another factor is exploding demand from China. “We have not had time to manage that demand,” Silliere said.

June gasoline futures rose 2.70 cents to hit $1.4005 a gallon.