The price of New York oil on Wednesday struck an historic peak at $114,95 on news that United States energy inventories tumbled last week and as the US currency hit an all-time low against the euro, traders said.
Later on Wednesday, New York’s main oil contract, light sweet crude for delivery in May, stood at $114,37 a barrel, up 58 cents on Tuesday’s close.
London’s Brent North Sea crude for June struck its own record high of $112,73 a barrel. It stood at $112,16, up 58 cents, later on Wednesday.
The US Department of Energy said on Wednesday that stockpiles of American crude and gasoline tumbled in the week ending April 11, heightening concerns over tightening energy supplies.
US crude inventories slumped by 2,3-million barrels last week compared with analysts’ consensus forecast for a drop of 1,8-million. The department added that petrol stockpiles slid by 5,5-million barrels, which was far greater than expectations for a fall of 1,8-million.
Oil futures were also supported on Wednesday after the dollar plunged to an all-time low against the euro, traders added.
In the foreign-exchange market, the European single currency rocketed to a record high 1,5970 dollars after official data showed annual inflation across the eurozone had hit an all-time peak.
Inflation in the 15 nations sharing the euro jumped to an annual rate of 3,6% in March, the highest since the launch of the European single currency in 1999.
The announcement dampened prospects for a cut in interest rates by the European Central Bank, thereby driving the euro higher.
The weak US unit encourages demand for dollar-priced goods like crude, which become cheaper for buyers using stronger foreign currencies.
Victor Shum, of the Gertz energy consultancy, said oil prices would continue to rally.
“The market has generally ignored bearish news [such as forecasts of slower demand] and focused on the bullish [supply news].”
Recent production stoppages have also stoked supply worries but the reopening of several facilities in Mexico on Tuesday eased those concerns, analysts said. — AFP