The price of New York crude oil surged on Tuesday to the highest level for more than one year, supported by market expectations of falling United States energy stockpiles, dealers said.
New York’s main futures contract, light sweet crude for delivery in September, touched $77,47 — which was last seen on July 13 2006, the same day that it hit a record high of $78,40.
The US contract later stood at $77,29, up 46 cents from Monday’s close.
In London on Tuesday, the price of Brent North Sea crude for September delivery added 53 cents to $76,27 per barrel.
Traders are on tenterhooks ahead of Wednesday’s crucial inventories report from the US Department of Energy, which is widely expected to flag another decline in American crude reserves. That could push the New York crude price beyond its all-time high.
London Brent, meanwhile, remains $2 beneath its August 2006 record high of $78,64.
”If we see another draw in crude stocks as expected, and especially if there is a drop in stocks at [key US storage terminal] Cushing, it will push New York crude higher,” said Sucden analyst Michael Davies.
Last week, prices rallied after the US government revealed that crude inventories had fallen by 1,1-million barrels, prompting renewed supply jitters.
Crude futures had dipped on Monday as traders cashed in profits after New York crude had surged close to a record close last Friday, traders said.
But prices were underpinned on Tuesday by suggestions that the Organisation of the Petroleum Exporting Countries (Opec) would not increase production of crude oil at its output meeting next month, they added.
The oil producers’ grouping had indicated last week that it might increase output in the fourth quarter.
However, according to Iranian press reports, Iran’s Oil Minister, Kazem Vaziri-Hamaneh, said on Monday that the Islamic republic did not support higher oil production among Opec member states. Iran, the second-largest producer in Opec after Saudi Arabia, is against any hike in output by the cartel.
”Comments from Iran that the next Opec meeting agenda will not include changes in output serve to lend a bullish tone to the market, and the expectations of a further attempt on the record levels remain high,” added Bank of Ireland analyst Paul Harris.
Organisations such as the International Energy Agency have repeatedly called on Opec to boost production of crude oil to meet voracious demand. But the cartel has refused to do so, saying any shortage of gasoline and other refined products is due to a lack of refining capacity, not of crude. — Sapa-AFP