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Oil price at record $94 a barrel Oil soars to touch $95 a barrel
(about 4 hours later)
Oil prices have hit a new record of $94 a barrel, as US government data showed a surprise fall in crude stockpiles for the second week in a row. Oil prices continued their upward ascent, touching $95 a barrel in late New York trade as crude inventories disappointed for the second week.
New York light crude jumped $3.62, or 4%, to $94 a barrel, while London Brent traded at $90.74 a barrel, up $3.30, in late afternoon trade in Europe. US light crude ended the trading session up $4.15 to $94.53 a barrel, while London Brent traded at $90.63 a barrel, up $3.19.
The US government's figures showed that domestic crude stocks fell by 3.9 million barrels last week.The US government's figures showed that domestic crude stocks fell by 3.9 million barrels last week.
Analysts had forecast an increase of 100,000 barrels.Analysts had forecast an increase of 100,000 barrels.
"I am very surprised, the crude number is insanely bullish, it's a big drop, for the second week in a row," said Mike Wittner, global head of oil research at SocGen in London."I am very surprised, the crude number is insanely bullish, it's a big drop, for the second week in a row," said Mike Wittner, global head of oil research at SocGen in London.
Volatile tradeVolatile trade
The US is the world's biggest energy consumer and therefore, the state of its inventories is a key concern.The US is the world's biggest energy consumer and therefore, the state of its inventories is a key concern.
Over the course of Wednesday, prices rocketed by as much as $4 to $5 in highly volatile trade.Over the course of Wednesday, prices rocketed by as much as $4 to $5 in highly volatile trade.
An array of factors have been driving oil prices higher.An array of factors have been driving oil prices higher.
Oil prices have risen as the sliding greenback makes oil, which is priced dollars, cheaper to buy outside the US.Oil prices have risen as the sliding greenback makes oil, which is priced dollars, cheaper to buy outside the US.
The dollar hit its weakest levels against the pound since 1981 on Wednesday.The dollar hit its weakest levels against the pound since 1981 on Wednesday.
At the same time, oil investors have been casting a nervous eye on Turkey's threats to carry out a major military incursion into northern Iraq to attack Kurdish rebels.At the same time, oil investors have been casting a nervous eye on Turkey's threats to carry out a major military incursion into northern Iraq to attack Kurdish rebels.
In past months, there have also been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran and heating supplies for the US winter.In past months, there have also been concerns about the stop-start violence in Nigeria's main oil producing region, the international community's unresolved nuclear dispute with Iran and heating supplies for the US winter.
Mexico was forced to halt one-fifth of oil production at the start of the week by a tropical storm hitting its Caribbean coast, sparking further supply fears, but it now expects to resume full production by Wednesday.Mexico was forced to halt one-fifth of oil production at the start of the week by a tropical storm hitting its Caribbean coast, sparking further supply fears, but it now expects to resume full production by Wednesday.
Some analysts expect crude prices to hit $100 a barrel before the end of the year.Some analysts expect crude prices to hit $100 a barrel before the end of the year.