By Jason Simpkins
Staff Writer
Crude oil spiked to a new all-time intra-day high of $82.51 a barrel – finally closing at a record $81.93 a barrel, up 42 cents – on the New York Mercantile Exchange yesterday (Wednesday), thanks to continued concerns over refinery outages and after a U.S. Energy Department report showed a larger-than-expected U.S. inventory decline.
Supplies fell by 3.87 million barrels in the week ended Sept. 14, the 10th drop in 11 weeks, the report showed.
But oil prices dipped on profit-taking early today (Thursday), with contracts for light, sweet crude for October delivery skidding by 9 cents to $81.84 a barrel in Asian electronic trading on the NYMEX by mid-morning in Singapore, The Associated Press reported.
“Oil pricing has increased about 20 percent in the last 18 trading days or so and such a sharp surge in pricing is bound to result in some profit taking and that will provide some prompt relief to oil markets," Victor Shum, an energy analyst with Purvin & Gertz in Singapore, told The AP.
But the price decline – and profit-taking – was tempered by ongoing concern over a potential tropical storm threat to oil and gas installations in the Gulf of Mexico, analysts said. That’s especially true headed into a weekend, Shum said.
Oil has been riding high the past couple of weeks as supplies diminish and demand increases. The threats posed by tropical storms and hurricanes as well as civil unrest in several oil producing regions have also driven prices higher. Oil, which is up a third since the start of the year, is now fast approaching $85 a barrel.
The Organization of Petroleum Exporting Countries (OPEC) raised output last week by 500,000 barrels a day. The increase failed to calm consumers and investors alike. Many, now expect supplies to come up short this winter.
OPEC may call for another production boost, should the price remain high. Prices of $85 per barrel or more could damage global economic growth as well as demand for OPEC oil.
News and Related Story Links:
- Consumer prices: http://www.bls.gov/cpi.
- Housing construction: http://www.census.gov/newresconst.
- Money Morning News Analysis: Crude Oil Over $80 a Barrel.
- The Associated Press: Consumer Prices, Housing Drop.
- The Associated Press: Oil Prices Slip Below $82 a Barrel.