LONDON, Oct 15 (Reuters) Oil zoomed to a new record high above $85 a barrel on Monday as a robust demand picture amid booming commodity markets and fresh geopolitical worries put tight oil supplies into sharp focus.
U.S. light, sweet crude for November delivery was $1.15 higher at $84.84 a barrel by 1122 GMT, off a new record high of $85.19 -- its fifth straight session of gains.
London Brent crude was $1.21 higher at $81.75, off its record high of $81.93.
''A run at $90 is now seen as reasonable,'' Citigroup analysts said in a note.
Oil has remained above $80 for most of the past month after soaring from below $70 in mid-August, fuelled by a mixture of supply concerns ahead of winter and record lows for the dollar, which has driven speculators to buy oil as a hedge.
Regulatory data released on Friday showed that speculators on the New York Mercantile Exchange crude oil market increased their net long positions in the week to Oct. 9.
Analysts said mounting evidence the global economy had largely shrugged off the financial market credit crunch and would grow underpinned a bullish oil outlook, especially against a backdrop of disappointing crude supplies, especially from non-OPEC producers.
The Organization of the Petroleum Exporting Countries (OPEC), poised to boost supplies by an extra 500,000 barrels a day from Nov. 1, on Monday raised its forecast for demand for its oil this winter and said it appeared more likely that top consumer the United States would avoid a sharp economic slowdown.
U.S Energy Secretary Sam Bodman said last week the U.S.
economy had been ''remarkably resilient'' to record high oil prices.
Analysts said the tension that erupted last week after the Kurdistan Workers Party (PKK) said it would move back into Turkey from northern Iraq and target the Turkish government, had helped inject nervousness into an already stretched market.
The Middle East pumps a third of the world's oil and supply disruptions there can hugely impact the oil price.
The Turkish government is expected to seek approval from parliament this week for a major operation against the Kurdish rebels in the mountains of northern Iraq. The U.S. has urged restraint.
''We haven't had geopolitics for 9-12 months, and suddenly they are coming back at the worst time... Geopolitics strikes when you least want them to,'' said Merrill Lynch's head of global commodity research, Francisco Blanch.
Oil's surge comes at a time commodity markets are booming, led by strong demand from emerging markets such as China and India. Gold struck a 28-year high on Monday, while platinum hit a record high. Copper, lead and nickel were also high.
''I think the demand picture looks fairly good. I don't think you have had a big effect of the credit crisis on oil or for that matter any commodity. They have behaved in an uncorrelated fashion. The growth momentum is pretty strong,'' added Blanch at Merrill Lynch.
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