Oil hits record over $80 on tight supply

By Richard Valdmanis

NEW YORK (Reuters) - Crude oil prices vaulted to a record high $80 a barrel on Wednesday as dealers focused on tight inventories in top consumer the United States ahead of peak winter demand.

A rash of fires at BP's oil fields in Alaska's North Slope added to the record run, though BP said the accidents had minimal impact to production that was already being curtailed by routine maintenance.

The surge in oil prices came a day after OPEC agreed to a small production hike in an effort to soothe consumer nations' fears that soaring crude costs could slow economic growth.

"The OPEC outcome was not enough of a shocker to turn around a market that likes to read extremes," said Olivier Jakob of oil consultancy Petromatrix.

U.S. light crude for October delivery was up $1.62 at $79.85 per barrel at 2:30 p.m. EDT after setting a record high of $80.18 a barrel earlier. London Brent crude was up $1.12 at $77.50 a barrel.

Adjusted for inflation, prices are still below the $90-a-barrel peaks of the Iranian Revolution in 1979 and the start of the Iran-Iraq war the following year.

Crude oil stocks in top consumer the United States fell 7.1 million barrels last week to their lowest level in eight months ahead of the winter heating season, according to the U.S. Energy Information Administration.

Analysts had expected a fall of 2.4 million barrels.