by Perrine Faye
LONDON, Aug 3 (AFP) - World oil prices shot up to new record-high levels on Tuesday on terrorism fears and a warning from OPEC`s president that the cartel has little scope to increase output in the immediate future.
New York`s reference contract, light sweet crude for delivery in September, rose above 44 dollars per barrel for the first time, reaching a new record of 44.24 dollars in pre-opening electronic deals.
It later eased, falling 21 cents to 43.61 dollars in early trading compared with Monday`s closing price.
London`s Brent North Sea crude oil for September delivery rose to as high as 40.45 dollars per barrel in electronic trading, the highest level since October 1990 when it reached 40.95 dollars in the wake of Iraq`s invasion of Kuwait.
In late deals the contract stood at 40.09 dollars, up 12 cents from the previous close.
Commerzbank analyst Jon Rigby said a number of supply-driven factors were behind the rises.
"There is this terror alert in the US, which highlights the amount of political risk in the oil price. The fear of terrorism will always push the oil price up," he said.
Traders baulked at comments from the president of the Organization of Petroleum Exporting Countries, Purnomo Yusgiantoro, who said the cartel needed time to increase supply.
"We can`t increase supply at this moment. Yesterday (Saudi Arabian Oil Minister) Ali al-Nuaimi said they could but they need time," Yusgiantoro, who is also Indonesia`s energy minister, said in Jakarta.
He described current oil prices as "crazy".
The price of the OPEC basket of seven crude oils reached 39.04 dollars on Monday, the highest since the benchmark was introduced in 1980, an OPEC spokesman said Tuesday.
"It is a record. The former highest price we had was 38.94 dollars on September 28, 1990 during the invasion of Kuwait," he said from the cartel`s headquarters in Vienna.
Rigby meanwhile said that Yusgiantoro`s comments "confirm that there is not a huge amount of spare capacity left in the system, which is true".
Heightened terrorism worries have also helped lift prices since the United States warned Sunday of possible Al-Qaeda attacks on key US financial centres.
And in Iraq a major attack on the main pipeline connecting the oil fields of Kirkuk with the Turkish port of Ceyhan halted limited exports through northern Iraq, a Northern Oil company official said.
"An improvised explosive device was placed close to a network of pipelines at the level of Al-Fateha, west of Kirkuk, causing a big explosion and huge fires that damaged the main pipeline running to Ceyhan and stopped exports," Nasir Qassim, a logistics and security official with the company, told AFP.
Yusgiantoro said terrorism and the threat of disruptions to supply by Russia`s largest oil producer, Yukos, had added to the markets` concerns.
Yukos faces a 3.4-billion-dollar tax bill for 2000 that it cannot pay because its assets have been frozen. Company chief executives and lawyers have repeatedly warned that Yukos could be forced to declare bankruptcy within days.
OPEC ministers would meet in September to discuss managing supply and demand, said Yusgiantoro.
"There`s still an opportunity for prices to go down but this will depend on supply and demand" as well as the other factors, he said.
OPEC agreed in June to raise its output ceiling by two million barrels per day in July and by a further 500,000 barrels from August 1.