Oil price rises up to US 144 a barrel

July 3rd, 2008 - 4:49 pm ICT by Amrit Rashmisrisethi  

Crude OilOil prices gave a new record and rose up to USD 144 a barrel as the government reported a bigger-than-expected drop in US stockpiles and the threat of conflict with Iran weighed on traders’ minds.

A barrel of crude has gone up by nearly half since the end of last year, when oil was going for USD 96 a barrel.

Light, sweet crude for August delivery rose as high as USD 144.32 on the New York Mercantile Exchange shortly after the regular trading session ended. The contract also notched a new closing record, settling at USD 143.57 - a full USD 2.60 above the previous high from a day earlier.

In London, Brent crude futures rose USD 3.59 to settle at USD 144.26 on the ICE Futures exchange. Oil first traded above USD 100 a barrel in January.

The Energy Department’s Energy Information Administration said crude oil supplies fell by 2 million barrels last week, or about 800,000 barrels more than analysts surveyed by the energy research firm Platts predicted.
The report offers a mixed picture of energy used by the world’s thirstiest oil consumer. Gasoline supplies unexpectedly grew by a considerable amount, and demand continued to slide - suggesting that record fuel prices are prompting a real shift in Americans’ driving habits.
About 40 per cent of all seaborne oil trade passes through the Strait, according to the US EIA.

The US State Department on Tuesday criticised comments by an unidentified senior US defence official who told ABC News there was an increasing likelihood Israel would attack Iran over its nuclear programme.

Adding to supply worries, OPEC President Chakib Khelil said the cartel did not have enough spare capacity to replace Iranian oil if Tehran were to cut exports due to an attack.

Traders will look out for US oil inventories data later on Wednesday and the monthly US employment report due on Thursday for further indications of the economic outlook for the world’s top oil consumer.

“We can expect oil price fluctuations to be limited today and tomorrow as the market is awaiting stocks in the US and payroll tomorrow,” said Ryuichi Sato, a commodity analyst at Mizuho Corporate Bank. Weekly US oil inventory data is expected to show a 100,000-barrel fall in crude stocks, a 200,000-fall in gasoline stocks, and a 1.9-million-barrel build in distillates.

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