Sept. 27 (Bloomberg) -- Crude oil surged to a record $49.75 a barrel in New York amid concern rebel attacks in Nigeria will reduce production and U.S. refiners will struggle to replenish supplies disrupted by Hurricane Ivan.

Royal Dutch/Shell Group's venture in Nigeria evacuated 235 workers from the Niger River delta Sept. 24. U.S. oil supplies fell 10 percent in the eight weeks ended Sept. 17, leaving them close to a 29-year low. The government agreed Friday to loan refiners barrels from emergency reserves.

``This is a market that's tighter than it was at the beginning of the 1973 oil crisis,'' said Daniel Yergin, chairman of Cambridge Energy Research Associates, at an energy conference in Washington. ``There is no margin for error.''

Crude oil for November delivery rose 76 cents, or 1.6 percent, to close at a record $49.64 a barrel on the New York Mercantile Exchange. Prices reached $49.75, the highest intraday price since futures began trading in 1983. Oil futures were up 76 percent from a year earlier. Prices have risen in eight sessions, the longest stretch since August 2002.

In London, the November Brent crude-oil futures contract rose 60 cents, or 1.3 percent, to close at a record $45.93 a barrel on the International Petroleum Exchange. Brent reached $46.28 a barrel, the highest intraday price since the contract began trading in 1988.

``I think you're going to see $60 before you see $40,'' said Boone Pickens, who oversees more than $1 billion in energy- related hedge funds in Dallas, in an interview. In May Pickens predicted oil would climb to $50. He has more than tripled the money in his energy commodity fund, increasing it to more than $480 million from $150 million at the start of 2004.

`Slow Economic Growth'

U.S. stocks fell today because of heightened concern that rising energy costs will hamper earnings growth. Energy is the only one of ten broad industry groups in the Standard & Poor's 500 Index for which analysts' earnings estimates rose over the past 30 days, according to Thomson Financial.

``Everyone has to drive and heat their homes but lower- income people will feel the most pain from higher gasoline and heating-oil prices,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. ``In real terms prices aren't as high as in 1981 but that doesn't mean they aren't high and won't hurt the economy. This is going to slow economic growth.''

The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department. That's $73.39 in 2004 dollars. In 1974, a barrel of oil averaged $9.07, which would be $34.83 today. Prices surged that year after the Arab oil embargo that followed the Arab-Israeli war of 1973.

Stockpiles Plunge

U.S. crude-oil stockpiles fell 9.1 million barrels to 269.5 million in the week ended Sept. 17, the Energy Department said. Inventories are 5.8 million barrels from being the lowest since September 1975. It was the first time since 1988 that supplies had dropped for eight straight weeks.

Supplies probably declined by 3.7 million barrels last week, according to the median of forecasts in a Bloomberg survey by nine analysts before the department's report on Sept. 29. ``This is a market that will react sharply to political events to security threats to hurricanes, Yergin said. ``This is the most sensitive oil market I've ever seen.''

Heating oil for October delivery rose 1.01 cents, or 0.7 percent, to close at a record $1.368 a gallon in New York. Prices reached $1.375, the highest intraday price since the contract began trading in 1978.

Cheaper Oil

New York crude oil averaged less than $20 a barrel through the 1990s. Prices dropped as low as $10.72 in December 1998 as OPEC flooded the market while demand fell. Oil has been climbing since then, with the only significant interruption coming after the Sept. 11 terrorist attacks cut demand.

Executives at BP Plc and Royal Dutch/Shell Group said this month that higher oil prices will probably last. BP Chief Executive John Browne said Sept. 17 that ``it is unlikely that we will see the weak prices of the 1990s ever again.'' Shell last week raised some of its long-term price assumptions to $25 a barrel from $20.

Shell evacuated workers at Soku and Ekulama, close to the Nigerian city of Port Harcourt. The decision followed a threat made by a rebel leader known as Commander Abiye of the Niger Delta People's Volunteer Force in a telephone interview with Reuters on Sept. 23, in which he said his forces might attack oil installations.

Nigeria, Africa's top oil producer, pumps about 2.4 million barrels a day, and was the fifth-largest supplier of crude to the U.S. this year, according to the U.S. Energy Department. Nigeria ships oil with a low sulfur content, which makes it easier to refine into gasoline.

Geopolitical Risks

``I think geopolitical risks are to blame for the current rally,'' said Carl Larry, an associate director of energy futures at Barclays Capital Inc. in New York. ``We will also continue to see Nigerian unrest. The shooting of the French ex-pat, more than likely by al-Qaeda, over the weekend is putting fears into the market.''

A Frenchman working for Thales SA, Europe's biggest maker of military electronics, was shot dead while driving home in the Saudi Arabian city of Jeddah. He's the second European to be killed in the kingdom in 10 days. Saudi Arabia is the biggest oil exporter.

``I think it could only hit $60 if there is a nasty shock like a real attack on Saudi oil production facilities or some confluence of influences that takes two to three million barrels a day out of the oil market,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts. It is ``not the most likely scenario, but it could happen,'' he said.

Technical traders who watch charts to predict price movements find their tools of little use when prices rise to records.

``It's really hard to find any technical tools that are relevant right now,'' said Marshall Steeves, an energy analyst with Refco Group Inc. in New York.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: September 27, 2004 15:32 EDT