Oil prices in New York closed on record highs tonight, reaching $42.33 after trading at $42.38 earlier.
The 6% surge follows weekend violence in Saudi Arabia, when 22 people, including 19 foreigners, were killed in an attack and hostage taking in the eastern city of Al-Khobar.
London prices, for Brent crude, rose almost two dollars to over $38 a barrel. Prices rose 1.7% in Asian trading overnight to $40.50 a barrel.
The main European stock markets registered falls in share prices, with the London FTSE shedding 0.18% on the day. New York was less affected, with both main indices (Dow Jones and Nasdaq) gaining slightly.
An EU Commission spokesman admitted today that the price rise would have a negative effect on growth in the eurozone.
If oil rates remained at in excess of $40 a barrel and the euro stayed around $1.22, he said growth would reduce by 0.2% from the Commission's current prediction of 1.7% this year.
Saudi authorities have been assuring the international community that oil production facilities are secure and that there will be no effect on supplies.
Speaking on RTÉ Radio this morning, AIB Global Treasury Chief Economist John Beggs said he did not think prices would fall for some time.
