Oil Rises to Record After U.S. Reports Unexpected Supply Drop

Robert Tuttle
Bloomberg
Wednesday, July 2, 2008

Crude oil futures rose to a record above $144 a barrel in New York after a U.S. government report showed an unexpected decline in inventories.

Supplies dropped 1.98 million barrels to 299.8 million last week, the lowest since January, the Energy Department said. Analysts in a Bloomberg News survey had predicted the report would show a 500,000 barrel rise in inventories. Prices also climbed as the dollar weakened.

“We dropped about 2 million barrels on crude and most everyone was looking for a slight build,” said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. “That leaves us somewhere around 7 to 8 percent below normal on crude stocks.”

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Crude oil for August delivery rose $2.60, or 1.8 percent, to settle at $143.57 a barrel at 2:55 p.m. on the New York Mercantile Exchange. Futures touched a record $144.32 after the close of floor trading and have doubled in the past year.

Brent crude for August delivery rose $3.59, or 2.6 percent, to $144.26 a barrel on London’s ICE Futures Europe exchange. Futures touched a record $144.95 a barrel.

Oil’s appeal as a hedge against inflation may rise if the European Central Bank increases interest rates tomorrow, causing the dollar to fall. The European Central Bank will lift its 4 percent benchmark main refinancing rate by a quarter-percentage point tomorrow, according to 57 of 58 economists surveyed by Bloomberg News.

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3 Responses to “Oil Rises to Record After U.S. Reports Unexpected Supply Drop”

1. GARKO FACTOR Says:
   July 4th, 2008 at 6:56 am

   right.
   exactly why it is such a positive thing the way that Water4Gas is taking off but it is not fast enough.
   it is not just about improving MPG markedly.
   it isn’t even the fact that we have evidence of it dropping carbon emissions down to zero
   and the fact that it makes your car engine purr like a kitten is also secondary
   the main thing is that every car and truck and suv in the country can be converted for less than $200 and it would drop our dependency on Big Oil overnight.
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2. r jones Says:
   July 5th, 2008 at 8:50 am

   Wait a minute here, the oil is in over supply mode and the prices go up, sounds like bull sh-t, We all know that they have to keep rapeping us until we are in the soup lines, before the bankers get a job well done, from the Bildaburgers.

   HHO good when its warm out could freeze in winter

3. Daniel Says:
   July 5th, 2008 at 11:40 pm

   I hate these jerks…Damn NWO. Just read 83% of protestants say Jesus not only way to heaven. Antichrist is around the corner and these jerks are paving the way…..intentionally, and in every arena, from schools to the gas tank. Time to pack a bag and loose your trackable cell phone. They have over 800 secret prisons set up for the dissenters…look it up. I’m seriously starting to get a bad feeling about the immediate future. God help us if Obama gets in.