NEW YORK, 22 May 2008 — Oil prices surged more than $3 to a record near $133 a barrel yesterday after a US government report showed a surprise drop in crude stockpiles, reinvigorating fears of a worsening supply crunch.
The gains bring oil up more than 30 percent so far this year in a rally that has raised alarm bells in consumer countries like the United States, already hard hit by a housing slump and credit crisis.
“The market is in a very bullish mood and these statistics will do nothing to change that,” said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
US crude gained $3.52 to $132.50 a barrel by 1755 GMT after hitting a fresh peak of $132.70. London Brent rose $4.34 to $132.18.
The surge came after the US Energy Information Administration showed crude stockpiles in the world’s biggest energy consumer fell 5.4 million barrels last week, countering expectations for a build.
“This report gives the market every reason to rally,” said Rob Kurzatkowski, analyst at optionsXpress in Chicago.
The fall in weekly inventories is matched by concerns supply problems will continue for years as production continues to fall short of growth in demand. Oil for delivery in 2016 rose above $142 a barrel yesterday — making it the highest contract on the futures curve.
