NEW YORK (CNN/Money) - Oil prices closed at record highs for a third straight session on Tuesday, despite a pledge to increase production by Saudi Arabia, a top exporter in the Organization of Petroleum Exporting Countries (OPEC).
Light crude for November contract settled 26 cents higher at $49.90 a barrel on the New York Mercantile Exchange. Light crude reached an intraday record of $50.47 earlier in the session.
In London, Brent crude set a new peak at $46.80 a barrel and ended at $46.45, up 52 cents.
Prices for U.S. crude futures first broke through the $50 level late Monday.
Oil prices have risen about 55 percent this year as rising consumption and the fallout from years of underinvestment in supply infrastructure encourage big-money funds to speculate heavily in oil futures.
"Fifty-dollar oil is just another stop on the road to much higher crude prices," Peter Schiff, president of asset managers Euro Pacific Capital, which oversees $350 million, told Reuters.
Schiff sees the current price spike topping off at $55 to $60 a barrel.
Producers are pumping at just about full tilt to feed demand, with China's economic expansion powering the fastest output growth in 24 years. Worries about supply security in Saudi Arabia, Iraq and Russia have magnified the price surge.
The move above $50 prompted Saudi Arabia to announce it will boost its official production capacity by 500,0000 barrels per day (bpd) to 11 million bpd in order to help ease supply concerns.
The new capacity is not expected to make any immediate impact on actual production. Riyadh has already said it will meet demand for 9.5 million bpd this month and next.
OPEC, which controls more than half of global crude exports, is producing at its fastest rate since the late 1970s in an effort to control prices, but much of the extra crude is not of the quality best suited for transportation fuels.
"At the moment, there's nothing we can do. OPEC has spare capacity. However, whatever we do, there is no sensitivity in the market," OPEC president Purnomo Yusgiantoro told Reuters on Tuesday.
Prices hit new highs after rebels fighting for self determination in Nigeria warned oil companies to shut production in the Niger Delta before they declare an all-out war on Oct 1.
Companies working in the delta shrugged off the threat. Royal Dutch/Shell and Italy's Agip, a unit of ENI, said they saw no reason to stop oil operations. Shell has already cut output by 30,000 to 40,000 bpd due to security curbs.
-- Reuters contributed to this report