LONDON, Nov 7: Crude oil prices closed in on $100 per barrel on Wednesday after striking fresh record highs on the back of global supply concerns and a weak dollar, traders said.
New York’s main contract, light sweet crude for December delivery, hit an historic high of $98.62 per barrel but then fell back to $97.24, a gain of 54 cents on the day, after the latest US stockpile figures.
Brent North Sea crude for December delivery hit a record $95.19 before it too slipped back to $94.21, up 95 cents.
“So we are approaching ever closer to the triple digit mark and in our opinion the $100-level will provide a real test to how strong this bull run (push higher) is,” Sucden analyst Michael Davies said in London.
Oil was sharply higher in early Wednesday trade as the market bet on another large fall in US crude oil inventories but in the event, the drop was only 800,000 barrels in the past week, much less than the 1.8 million expected.
The keenly awaited snapshot on stockpiles from the US Department of Energy also revealed that distillates, which include heating oil, unexpectedly rose by 100,000 barrels last week. Analysts had expected a decline.
Demand for heating fuel is expected to shoot higher during the northern hemisphere winter.
On Tuesday, the US Energy Information Administration (EIA) said “global oil markets will likely remain stretched” because world demand has grown much faster than supply outside of the Organisation of Petroleum Exporting Countries (Opec).
That has put pressure on Opec and inventories to bridge the gap, it said, adding that geopolitical risks, tight inventories in rich countries and worldwide refining bottlenecks were set to keep oil prices high and volatile.
“In the context of the $4.80 move up in prices in the past week, $100 crude now looks a relatively modest target,” he added.—AFP
