NEW YORK (CNNMoney.com) -- Oil prices hit fresh record highs Friday as traders fretted over global supplies and violence flared in the Middle East.
Crude hit a record high in electronic trade overnight of $92.22, surpassing the previous record trading high of $90.60, set Thursday
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| Oil prices set new record of more than $92 a barrel. |
U.S. crude for December delivery rose $1.40 to settle at $91.86 a barrel on the New York Mercantile Exchange, topping Thursday's record closing price of $90.46 a barrel.
Oil prices have jumped 7 percent this week on supply concerns, global security concerns and what many analysts see as a rush of speculative trading.
On Thursday, the United States tightened sanctions against Iran, freezing assets and barring business deals with the country's elite military unit, the Revolutionary Guard, and some state banks and officials.
Designed to increase pressure on Iran to curtail its nuclear program, which Iran says is intended for peaceful purposes, the move is sure to heighten tensions with the world's fourth-largest oil exporter and producer.
Also on Thursday, reports said Lebanon's military fired on Israeli warplanes. While neither country produces much oil, traders fear any conflict could draw in neighboring countries, such as Iran or Saudi Arabia.
Turkish attacks on Kurdish separatists based in northern Iraq but conducting cross-border raids into Turkey continued throughout the week. Northern Iraq is home to a big chunk of the country's oil production, estimated at about 2 million barrels a day. Attacks could further disrupt the country's already war-torn oil sector.
And an OPEC minister indicated Thursday that the cartel, which supplies some 40 percent of the world's 85-million-barrel-daily oil habit, wouldn't boost production at its next meeting in December.
"Prices seem to be off to the races, again," Peter Beutel, an oil analyst at Cameron Hanover, wrote in a research note. "With China and India adding unquenchable demand to the equation, old mantras about the relationship of oil prices to economic conditions have unraveled."
Beutel now has a target price range for oil between $91.37 and $97.57.
Oil prices rallied Wednesday on news of a big, unexpected drop in crude supplies in the United States.
In its weekly inventory report, the Energy Information Administration said crude stocks plunged by 5.3 million barrels last week. Analysts were looking for an increase of 300,000 barrels, according to a Dow Jones poll.
Oil prices are now nearly as high as they were in the early 1980s, when adjusted for inflation. In 2006 dollars, oil would have cost somewhere in the mid-$90s following the outbreak of the Iran-Iraq war.
But many economists say Americans spend a smaller percentage of their income on fuel now than they did then, largely due to rising wages.
The good news for drivers now is that the record crude prices so far haven't appeared to influence gasoline prices.
While crude has surged nearly 30 percent in the last month, the retail cost of gasoline has barely moved, going from a national average of $2.81 a gallon in September to $2.82 this month, according to the motorist organization AAA.
Experts say weak demand is to blame, as the summer driving season is over and it appears Americans are beginning to drive less anyway with gasoline near $3 a gallon.
Crude oil prices have more than quadrupled since 2002. Analysts say surging global demand combined with limited new supply is the main underlying factor.
The surge in prices has also attracted lots of speculative investment money, further driving prices higher. And the tight supply and demand situation magnifies the effect that geopolitical tensions have on prices, as there is less spare supply available globally to cover a disruption from places like Iran, Nigeria or Venezuela.
The falling U.S. dollar has also played a role, as oil worldwide is priced in dollars.
Oil producing nations have less incentive to ramp up output if the buying power they receive per barrel is declining, and foreign consumers have less incentive to reduce demand if oil is, relatively, getting cheaper for them. 
