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Crude
oil price futures made their first foray past US$115 yesterday,
propelled to a new record by concerns about how much gas
will be available during the peak summer months.
Inventories of gas fell by 5.5 million barrels last week,
according to the Energy Department’s Energy Information
Administration, a much bigger decline than forecast by analysts.
Light, sweet crude for May delivery responded by rising
as high as US$115.07 on the New York Mercantile Exchange,
and later settled up $1.14 at a record US$114.93 a barrel.
The report said crude inventories fell by 2.3 million barrels
last week, compared to the gain analysts expected.
Oil prices were also boosted by the falling dollar, which
declined to a new low against the euro yesterday. Many investors
buy commodities such as oil as a hedge against inflation
and a falling greenback. A weaker dollar also makes oil
cheaper to investors overseas.
But the market was torn and traded sharply lower at times
due to data deeper in the report showing that the country's
appetite for increasingly expensive gas is declining.
“Demand
for gasoline is terrible,” said Phil Flynn, an analyst
at Alaron Trading Corp in Chicago. Gas demand has fallen
an average of 1 per cent each of the last four weeks compared
to the same period last year. “Demand should be rising
this time of year.”
The EIA report also said inventories of distillates, which
include heating oil and diesel, unexpectedly rose last week
by about 100,000 barrels. Analysts had expected a sharp
decline. May heating oil futures rose 0.91 cent to settle
at $3.283 a gallon.
In London, June Brent crude futures rose $1.08 to settle
at $112.66 a barrel on the ICE Futures exchange.
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