There was slight change in Oil after it rose to a record $112.21 barrel yesterday. This happened after an unpredictable drop in U.S. crude supplies.
The prices increased by 3.4 percent due to the 3.1 million-barrel drop in crude-oil inventories according to the Energy Department. There was an increase in gasoline futures as well. They rose by 2.6 percent reaching their highest level.
Stephen Schork, president of the Schork Group Inc. reported that “There is a risk premium being priced into the market with regard to the future availability of crude oil” further adding “This is a market that's being driven by speculation as much as it is by the fundamentals.”
The prices of crude oil for May delivery rose by 11 cents reaching $110.98 a barrel, at 1:22 p.m. Singapore time. This occurred in after-hours trading on the New York Mercantile Exchange. Futures rose by 2.2 percent that is $2.37 to reach $110.87 a barrel that was a record close. During the day oil prices settled peaked at $112.21. This was the highest ever since Nymex futures trading started in 1983.
Due to the 79 percent gain, oil reached the second highest level among nineteen commodities according to Reuters/Jefferies CRB Index. It followed wheat that has doubled. Increasing worldwide demand for raw materials and a declining U.S. currency have created records during 2008 for raw materials like corn, soybeans, rice and gold.
There was an increase in Brent crude price for May settlement. It rose by 3 cents to $108.50 a barrel at 1:14 p.m. Singapore time on London’s ICE Futures Europe exchange. It increased by 2 percent that is $2.13 to reach a record $108.47 a barrel. During the day, futures settled at the all time high, $119.50.
There was also an increase in gasoline prices for May delivery. It rose by 0.57 cents to $2.7799 a gallon. Yesterday futures settled at $2.8228 for gasoline blended with ethanol, called RBOB. This was a record price for RBOB. It started trading in October 2005.
There was a decline in the supplies of gasoline and distillate fuel including heating oil and diesel. In the previous week, Gasoline stockpiles fell by 3.44 million barrels to 221.3 million according to the yesterday’s report. However, it is expected that there can be decline of 3 million-barrel.
Supplies of crude oil for the previous week were 0.1 percent above the five year average for the period. They reached 316 million barrels according the department. However inventories rose by 1.8 percent, a week before. Gasoline stockpiles were 7.9 percent above the five year average from 9.1 percent above a week before.
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