NEW YORK ­ On Wednesday, crude oil prices briefly set a new record, topping $89 per barrel for November delivery, but ultimately settled at $87.40 a barrel on the New York Mercantile Exchange, reports Bloomberg.

The news service reports that a day earlier oil prices passed the previous all-time inflation-adjusted record reached in 1981, when Iran cut oil exports.

Higher crude will translate into more costly gasoline, according to AAA. Gasoline has declined in recent weeks after demand dropped with the end of the summer driving season. But that is likely to change as refiners begin passing on higher oil costs to consumers, according to AAA's spokesman, Geoff Sundstrom.

Oil traders, discussing the latest rise, cited a potential conflict on the border between Turkey and Iraq that could heighten Middle East tensions and possibly affect oil supplies from the region, reports The New York Times.

Analysts also say reasons for the price increases include refinery bottlenecks in the United States, a weak dollar, geopolitical threats in the Middle East, the war in Iraq, violence in oil-producing Nigeria, and resource nationalism in Venezuela and Russia that is driving away foreign oil investment.

"Markets hate uncertainty," said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation. "The fundamentals are very supportive of high oil prices. But the latest run-up has nothing to do with market fundamentals, but has to do with fear."

Turkey is an important pathway for oil exports from Iraq and the Caspian Sea. The Turkish military has threatened in recent days to cross the Iraqi border to root out Kurdish separatists who have mounted attacks inside Turkey, the Times reports.