Brent in euros hits all-time high of 93 euros/bbl
* Euro has weakened due to region's debt crisis
* Brent in dollars 18 pct lower from 2008 highs of $147.5/bbl
* Headache for policymakers as consumers feel pinch
LONDON, Feb 23 (Reuters) - Brent oil valued in euros set an all-time high on Thursday above 93 euros a barrel, beating 2008's pre-financial crisis high and adding fuel costs to euro zone debt troubles.
Brent, a global benchmark for crude, rose to 93.60 euros per barrel, exceeding a previous record on July 3, 2008 of 93.46 euros.
The record prices in euros, and also in British pounds, could further slow economic growth in Europe, where consumers are already being squeezed by tighter budgets due to widespread austerity measures and reduced availability of credit.
Dollar-denominated Brent prices at just over $124 a barrel are still well short of 2008's record $147. The common European currency has underperformed the dollar because of the euro zone's debt crisis.
"The recent strength of the U.S. dollar, the currency in which crude oil is traded, and the sharp rise in the oil price is likely to lead to further rises in the retail price of fuel in Europe and the UK and consumers can be expected to respond by trying to use fuel as efficiently as possible or by cutting back on non-essential travel," Caroline Bain, commodities analyst at the Economist Intelligence Unit, said.
Data published on Wednesday showed unexpectedly weak activity in Europe's most powerful economy, Germany, and in France, sparking fresh worries the region could tip into recession.
Risk sentiment towards the dollar has improved during the euro zone sovereign debt crisis, keeping a lid on the gains in crude prices denominated in the greenback.
"The issues around the euro zone translate into a much stronger dollar so Europe as a whole is not spared the rise in oil prices as it was back in 2008, when they enjoyed the buffer that their currency provided in relation to the price rise in dollar terms", BNP commodity strategist Harry Tchilinguirian said.
By 1222 GMT, Brent crude futures traded up $1.15 at $124.05 per barrel, having risen to highs not seen since May 2011 earlier in the session of $124.48 per barrel.
Brent crude prices on a sterling basis climbed to historical records of 79.19 pounds per barrel.
Tight crude availability due to tensions affecting producers Iran, South Sudan, Syria and Yemen, together with reduced output in the North Sea, have supported prices in dollars since the beginning of the year.
High prices could be key to elections being fought both in the United States and in France, and there has been increasing talk of the possibility that oil will be released from government-controlled inventories to alleviate price strength.
Sources told Reuters in January that the International Energy Agency has discussed a plan to release up to 14 million barrels per day of government-owned oil if tensions with Iran rise.
Many Asian buyers have also moved to reduce or limit their dependency on Iranian crude oil imports, after Washington and Brussels sought consensus on sanctions to deter Iran from pursuing its nuclear programme
"In Euros per barrel the price impact of the EU sanctions on Iran is greater than the impact of the total shutdown of Libya last year and the price spike is going to be a political challenge for politicians in the West running for re-election," Petromatrix's Olivier Jakob said in a note.
However, Jakob warned that a strategic release would be more difficult to justify this year.
"That is much harder to do this year because there is no supply disruption per se but instead a voluntary restriction on buying from a specific country," Jakob said. (Reporting by Zaida Espana; Editing by Anthony Barker)