Oil hits record over $80

By Matthew Robinson

NEW YORK (Reuters) - Oil hit an all-time high over $80 a barrel on Thursday after Hurricane Humberto forced the closure of some U.S. Gulf refiners, stoking supply concerns amid falling inventories in the world's top consumer.

U.S. crude settled up 18 cents at a record high $80.09 a barrel, after hitting an intraday record of $80.20 earlier. London Brent crude settled 28 cents lower at $77.40 a barrel.

U.S. gasoline futures helped lead prices higher after Hurricane Humberto shut oil shipping channels and three refineries as it slammed onshore in Texas, before being downgraded to a tropical storm.

Total, Conoco and Shell shut the refineries in Port Arthur, Texas, after a power failure cut electricity to the plants.

"Strength today came from gasoline, after some refineries were shut because of storm-related problems," said Eric Wittenauer, analyst at A.G. Edwards in St. Louis, Missouri.

Though oil prices have quadrupled since 2002, when adjusted for inflation the price is below the $90-a-barrel peaks of the Iranian Revolution in 1979 and the start of the Iran-Iraq War the following year.

Strong fundamentals and the recent price surge has lured more investors into oil markets, their enthusiasm growing thanks to a market structure that encourages favourable returns.

"Modest demand growth combined with no significant supply increases has caused oil inventories to decline sharply, creating backwardation in the oil forward curve, which is a very bullish signal," said Jeffrey Currie of Goldman Sachs.