Crude Oil Rises to More Than $94 a Barrel as Inventories Fall
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Crude oil rose to a record $94.74 barrel in New York after an Energy Department report showed that American inventories fell to a two-year low. Today’s 4.6% gain was the biggest since January 30.
Stockpiles dropped 3.89 million barrels to 312.7 million barrels last week, the department said. It was the lowest since October 2005. A 400,000 barrel gain was expected, according to a Bloomberg News survey. Supplies at Cushing, Okla., the delivery point for New York futures, fell 17%.
“We’ve lost a lot of oil at a time when we should be building supply for winter,” a senior trader at Alaron Trading Corp. in Chicago, Phil Flynn, said. “Nearly all the analysts expected inventories to rise, making this an extremely bullish number.”
Crude oil for December delivery rose $4.15 to settle at $94.53 barrel at 2:50 p.m. on the New York Mercantile Exchange. Futures touched $94.74 the highest since trading began in 1983. The exchange reported a high of $94.80 during the session and subsequently canceled the trade.
Oil rose 16% in October, the biggest one-month gain since September 2004. Prices are up 61% from a year ago.
“The DOE report was the catalyst for this breakout,” the vice president of risk management at MF Global Ltd. in New York, John Kilduff, said. “Prices are also up because of the falling dollar and strong GDP number, which is a sign that demand will pick up. Economic growth both here and abroad are leaving us vulnerable to the myriad of supply threats out there.”
