World Oil Prices
Strike Fresh Record at $123.87
Agence France Presse 7may2008
World oil prices struck a fresh intraday record of 123.87 dollars a barrel in Asian hours on Thursday, despite a larger-than-expected rise in US energy stocks.
The record reached by New York's main oil futures contract, light sweet crude for June delivery, just slightly exceeded the old intraday high of 123.80 dollars reached on Wednesday at the New York Mercantile Exchange.
The contract later traded 11 cents higher at 123.64 dollars a barrel in Asia from its record close of 123.53 dollars in New York.
Brent North Sea crude for June delivery was 24 cents higher at 122.56 dollars a barrel.
In London on Wednesday the contract touched an all-time peak of 122.70 dollars, before settling 2.01 dollars at 122.32 dollars.
Prices continued to rise despite a weekly survey by the US government showing that the country's crude stocks rose by 5.7 million barrels to 325.6 million barrels for the week ended May 2.
Oil Futures Vault $123 a Barrel
GREGORY MEYER / Wall Street Journal 8may2008
Crude-oil futures ended at a record for a third straight session Wednesday after the U.S. government showed stocks of distillates, a category of fuel that includes diesel and heating oil, grew tighter.
Light, sweet crude for June delivery settled up $1.69, or 1.4%, at $123.53 a barrel on the New York Mercantile Exchange. It earlier hit an all-time intraday high of $123.80 a barrel.
Crude's rise was outpaced by a record run for heating-oil futures, a proxy for the global distillate fuels that also include diesel. The Energy Information Administration reported U.S. stocks of distillates unexpectedly fell by 100,000 barrels last week and are below-average for this time of year. The rate at which refineries process crude also registered a surprise decline.
"The low level of crude throughput was bullish, and the counterseasonal draw in distillates is bullish," said Antoine Halff, deputy head of research at brokerage Newedge USA in New York. "These are driving the whole complex."
The closely watched weekly data showed U.S. crude inventories swelled four times more than expected, by 5.7 million barrels, while gasoline stockpiles jumped by 800,000 barrels. Other analysts interpreted the statistics as neutral to negative for short-term oil prices.
"I don't think we are really moving off the data at this point in time," said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis. "The market is on a continuation of a trend that we've seen of late. Any break in prices at this point is viewed as a buying opportunity."
The EIA's latest short-term energy outlook projects world oil demand will rise 1.4% this year due to growing consumption in emerging economies.
Demand's resilience in the face of record prices has forced many analysts to adjust price forecasts. The latest was Barclays Capital, which Wednesday increased its outlook by $16 to an average $116.90 a barrel this year because of what it sees as uncertain supply growth from outside the Organization of Petroleum Exporting Countries, solid demand and sluggish expansion in production capacity.
"While the current dynamics remain in play, we do not believe that analysts can even make the statement that fundamentals imply that prices should be lower," Barclays said in a note to clients. "We are in a phase during which the nature of the fundamentals is being revealed by the ascent of prices."
In other commodity markets:
RICE: Prices rose to their daily exchange-imposed levels of 50 cents higher amid concerns about the cyclone in Myanmar, and its potential effect on world supply, a trader said. Nearby July rice rose 50 cents per hundredweight to $21.60. Nearby May, which has no daily limit, gained 73 cents to close at $21.55.
GOLD: Futures were on the defensive following sharp gains by the U.S. dollar. Thinly traded nearby May gold fell $6.40 to close at $869.60 an ounce while most-active June gold declined $6.50 to settle at $871.20 on the Comex division of the New York Mercantile Exchange. While the dollar kept gold in negative territory, the metal erased some of those losses as crude oil rose.
source: p. C10 8may2008