Crude Oil Just Below $44 a Barrel

U.S. oil prices struck a new peak on Monday, climbing to just under $44 a barrel, after the United States raised its security alert to high for a possible Al Qaeda attack on a top financial institution.

Dealers said the U.S. terror alert gave an extra boost to oil prices, which were already firmer on worries of possible sabotage strikes on Middle East oil infrastructures at a time producers are pumping close to full tilt to meet soaring oil demand.

U.S. light crude hit a peak at $43.94 a barrel, marking a gain of 14 cents over Friday's settlement and the highest level reached since oil futures started trading on the New York Mercantile Exchange (search ).

U.S. authorities on Sunday warned that Al Qaeda (search) was planning attacks on five key financial institutions in New York, New Jersey and Washington and declared a high level threat alert on the World Bank and the International Monetary Fund, as well as the New York Stock Exchange (search) and other financial institutions such as Citigroup and Prudential Financial.

Traders predicted a near-term test of the $44 a barrel level.

"We're consolidating, but it's still looking like we might have to test some higher levels," said Rick Navy, an analyst at BNP Paribas.

Oil's recent gains have been driven in part by concerns that financial turmoil at Russia's Yukos (search ) oil company might cut exports from the world's second-biggest supplier.

Yukos has said it could collapse by mid-August because of a freeze on its bank accounts and assets over a $3.4 billion tax bill. Russian bailiffs have given Yukos a month to pay the debt.

Energy Ministry data showed on Monday that Russian oil output hit a new post-Soviet high of 9.33 million barrels per day in July, despite concerns over Yukos supplies.

Oil dealers say any disruption to Russian exports would stretch already tight global stockpiles and leave the OPEC producers' group with little power to counter any supply squeeze.

"We're feeling a little bit more secure about Russian supply today, offsetting the further anxiety over the (U.S. security) alert," said Tim Evans, an analyst at IFR Energy Services.

The Organization of the Petroleum Exporting Countries (search ), which controls more than half of world crude exports, raised its official production ceiling on Sunday by 500,000 bpd to 26 million bpd.

However, OPEC is pumping well over official output limits, at the highest levels in 25 years, and analysts say only Saudi Arabia has any significant spare capacity to boost production during emergencies.

The group's self-imposed limits exclude Iraq, where exports tallied about 1.5 million bpd in July and are expected to rise to between 1.7 million bpd and 1.8 million bpd this month, if there are no more sabotage attacks on key pipelines.