NEW YORK — Oil futures rallied to a record yesterday — more than $88 a barrel — on concerns about disruptions to Middle Eastern crude supplies and a growing view that domestic supplies aren't sufficient to meet fourth-quarter demand.

Traders are concerned that a Turkish incursion into Iraq in search of Kurdish rebels could disrupt crude supplies from northern Iraq.

"Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.

Yesterday, Turkey's prime minister said Monday's decision to ask Parliament for permission to pursue the rebels was not a sign Turkish forces will act immediately.

The Middle East tensions add to supply concerns that have been stoked in recent days by reports from the Energy Department, the International Energy Agency and the Organization of Petroleum Exporting Countries suggesting oil supplies are flat or falling as demand is growing.

Light, sweet crude for November delivery rose $1.48 to settle at a record $87.61 a barrel. Earlier, prices rose as high as $88.20, a trading record.

Despite the gains, oil is still below inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.

Many analysts argue that the supply and demand fundamentals don't support oil in the high-$80 range and believe speculative investing is the real culprit behind high oil prices. And as long as investors are willing to keep buying, prices will keep rising.