Gulf War Jitters Send Oil Prices Soaring : Futures market: Crude is $38 a barrel now, and some traders say $40 or even $60 is possible.

Oil prices rose more than $3 per barrel today to soar past the $38 mark for yet another record on the futures market, amid fear that war is imminent in the Persian Gulf.

Gasoline and home heating oil each shot past $1 a gallon, a day after Iraq said it might attack Saudi Arabian oil fields in retaliation for the international trade sanctions put in place after it occupied Kuwait.

“I can’t believe it,” said Ann-Louise Hittle, a senior oil analyst with Shearson Lehman Brothers. “People in the market are talking about $40 a barrel as being the next target.”

Light sweet crude was trading early this afternoon at $38.80 per barrel for November contracts, up $3.37 a barrel on the New York Mercantile Exchange. Oil rose above $37 per barrel this morning for the first time since the crude futures began trading on the exchange in 1983, and within hours it had shot above $38 per barrel.

At one point today, oil reached as high as $38.90 a barrel.

Trader Ed Kevelson at Dean Witter Reynolds said the new highs were coming in light volume.

“People are sort of scared away at these levels, when they walk in Monday morning and it’s almost $2 higher,” he said. “Certainly no one’s willing to sell at this point, when it looks like war is more imminent than ever before.”

Iraq’s leaders warned over the weekend that they would launch an all-out war before allowing the U.N. trade embargo to “strangle” their nation. The statement was viewed as the first time that Iraqi President Saddam Hussein had threatened a first strike, with Israel and Mideast oil fields mentioned as potential targets.

Recent estimates have put the price of oil at $60 per barrel if a shooting war develops in the gulf.

Crude’s surge today helped pull up the prices of refined products.

Home heating oil shot up 9.79 cents to $1.07 per gallon for October delivery. Unleaded gasoline rose 8.70 cents to $1.06 per gallon for October contracts.

Natural gas also rose sharply today, with November contracts going up 7.3 cents to $1.945 per 1,000 cubic feet.

The rise in oil prices comes despite a report today that total daily production of crude oil by OPEC members has risen from an estimated 19.7 million barrels in August to 22 million barrels now.

International Energy Agency official in Paris, speaking on condition of anonymity, said that given the estimated rise in output by the Organization of Petroleum Exporting Countries, the situation in world oil markets is “manageable, though not comfortable.” Oil companies have had to draw on stocks during a period normally reserved for building up reserves ahead of the high-demand winter season, he said.

The watchdog agency, which represents 21 industrialized Western countries, is scheduled to meet in Paris on Friday to assess the impact of the gulf confrontation on world oil supplies.