LONDON, 22 November 2007 — The price of crude oil surged to a record peak above $99 per barrel in New York yesterday on the back of the falling US dollar and tight global crude supplies, traders said.
They failed to top $100, despite official data which showed that US energy stockpiles fell greater than expected last week.
In early trading yesterday, New York’s main contract, light sweet crude for January delivery, rocketed to an historic $99.29. Following the release of data on US energy inventories, the contract stood at 98.19 per barrel, up 16 cents from Tuesday’s close.
In London, Brent North Sea crude for January delivery jumped to an all-time pinnacle of $96.53 per barrel and later stood at $95.76, up 27 cents.
“Oil soared to over $99 a barrel on continued concerns over supply tightness,” Sucden analyst Nimit Khamar said in London. “However, oil has relinquished those gains... as some looked to take profits after the impressive rally.”
The US Department of Energy (DOE) announced yesterday that reserves of US crude oil had sunk by 1.1 million barrels in the week ending Nov. 16. Analysts’ consensus forecast had been for a gain of 750,000 barrels. Oil prices “certainly may rally later on in the session,” Altavest trader Tom Hartmann said after release of the data.
“The market obviously was wrong with expectations of gains in the inventories and it seems there is some hesitation as to which way to push the market.”
The DOE added that US reserves of distillates, including crucial heating fuel and diesel, dived by 2.4 million barrels last week. That was far heavier than market expectations for a drop of 450,000 barrels.
Traders are worried about US energy reserve levels because the United States is the world’s biggest consumer of energy, ahead of No. 2 China.
In the coming months, meanwhile, heating fuel demand was expected to rocket as the northern hemisphere winter stokes demand for distillates.
Crude oil prices have surged by about 64 percent since the start of 2007.