By Brad Foss
The Associated Press

WASHINGTON - The price of oil charged to a new high above $47 a barrel Wednesday amid nagging concerns about instability in Iraq, the uncertain fate of Russian petroleum giant Yukos and the world's limited supply cushion.

Still, analysts pointed to recent developments in Iraq, Russia and Venezuela that could help temper the overriding fears that have fueled a 27 percent run-up in oil prices in just six weeks.

"There are some signs that things are getting better," said Tom Bentz, a trader at BNP Paribas Futures in New York.

"But the market is still in a very bullish mode," he added.

U.S. light crude for September delivery settled at $47.27, up 52 cents, on the New York Mercantile Exchange. It was the highest Nymex settlement price on record, although when adjusted for inflation oil still costs about $10 less per barrel than it did leading up to the first Gulf War.

Wednesday's rally was kicked off by an Energy Department report that showed widely expected declines in U.S. inventories of oil and gasoline.

"At the heart of why we are higher is that demand does usually grow at a steady basis from now until January and there is no great cushion of available supply," said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Conn.-based energy consulting group.

However, he said events in Iraq and Russia Wednesday provided a ray of hope that worst-case-scenarios could be averted and increasingly tight oil supplies could be sufficient to feed the growing global appetite.

"There are plenty of factors that would suggest that we need a major correction right now," Beutel said.

• Rebel Shiite cleric Muqtada al-Sadr accepted a peace plan Wednesday to end fighting in Najaf, Iraq.

• Officials at Russia's rail transport monopoly said China has agreed to step in and pay transportation fees to ensure that it continues to receive Yukos oil if the company is unable to cover the costs.

• And Venezuelan President Hugo Chavez survived a recall vote Sunday, decreasing the likelihood of turmoil within the ranks of the state-run oil company.

But traders appeared to cling to the signs of uncertainty that remain in each of these countries.

Traders were anxious about the oil supply in Russia, where Yukos is on the brink of bankruptcy as a result of the government's efforts to collect $3.4 billion in back taxes. The legal battle against Yukos, which pumps about 1.7 million barrels a day, has caused some alarm that productivity might suffer.

In order for prices to decline significantly, "we need to see Iraqi supplies coming back and the Yukos problems to go away," Bentz said.

On London's International Petroleum Exchange, Brent crude futures for October delivery traded at $43.03 per barrel, up 4 cents from Tuesday's floor trade close.