Oct. 29 (Bloomberg) -- Crude oil rose to a record above $92.50 a barrel in New York after Turkey's Foreign Minister said his government is considering ``all options'' including military action to deal with Kurdish rebels operating from Iraq.

``Our patience has come to an end,'' Ali Babacan said yesterday in Tehran following talks with his Iranian counterpart Manouchehr Mottaki. In Nigeria, Italy's Eni SpA said armed men seized six of its workers in an attack on a supply ship, heightening concerns about potential supply disruptions.

``There are still negotiations involving Turkey, the U.S. and Iraq,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. ``There are also reports of the seizure of a number of oil workers in Nigeria. At a time when everything is going right for the oil price this can only add fuel to the fire.''

Crude oil for December delivery rose as much as 93 cents, or 1 percent, to an all-time high of $92.79 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was trading at $92.63 at 10:14 a.m. Singapore time.

The weakness in the dollar is helping boost crude-oil prices, said Rowan Menzies, an analyst at Commodity Warrants Australia Pty in Sydney. The dollar fell to its lowest against the euro on speculation the Federal Reserve will cut interest rates this week as a U.S. housing slump reverberates through the economy.

On Oct. 26, oil in New York gained $1.40, or 1.6 percent, to settle at a record $91.86 a barrel. Oil rose 5.6 percent last week and is up 58 percent from a year ago.

Brent, Dollar Down

Brent crude oil for December settlement rose 93 cents, or 1.1 percent, to a record $89.62 a barrel on the London-based ICE Futures Europe exchange. It was at $89.36 at 9:45 a.m. in Singapore.

The dollar dropped to $1.4426 per euro, the weakest since the introduction of the 13-nation common currency in 1999, before trading at $1.4412 as of 8:33 a.m. in Singapore.

``The U.S. dollar is going down at a rate of knots,'' Menzies said. ``You've seen inflation-linked buying across the commodities, in oil, gold, silver and grains.''

Turkey can use different tools for fighting the Kurdistan Workers' Party, or PKK, including diplomacy, economic and military means as a last resort, Babacan told reporters. ``All options are on the table.''

Turkish Prime Minister Recep Tayyip Erdogan warned Oct. 27 that his country may order wider military attacks against the group's camps if needed, according to Turkish media. Turkey said it bombed PKK units in northern Iraq last week and sent troops across the border in pursuit of the militants.

Iran Tensions

Tensions over Iran, holder of the world's second-biggest oil reserves, are helping drive record oil prices, Commonwealth's Moore said. On Oct. 26 the U.S. accused Iran's military of supporting terrorism and announced new sanctions on the country. The U.S. wants Iran to halt uranium enrichment that it suspects is a cover for developing nuclear weapons.

Iran is still ``at least a few years away'' from being able to build a nuclear bomb, and there is time for diplomacy to head off a military confrontation, the head of the United Nations nuclear watchdog agency said yesterday.

International Atomic Energy Agency chief Mohamed ElBaradei said on CNN's ``Late Edition'' program he hasn't seen ``any concrete evidence'' of a secret Iranian weapons program.

In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, claimed responsibility for the kidnappings, which took place on Eni-controlled Saipem SpA's Mystras production and storage vessel. Eni didn't comment on any disruptions to shipping or production from the attack.

The U.S. consulate in Lagos on Oct. 19 warned that MEND was preparing to renew attacks against Nigerian oil installations and pipelines. Raids on Nigerian crude facilities last year cut output in Africa's biggest oil-producing nation by 20 percent.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net; Christian Schmollinger in Singapore at Christian.s@bloomberg.net

Last Updated: October 28, 2007 22:20 EDT