LONDON, Nov 21: The price of crude oil surged to a record peak above $99 per barrel in New York on Wednesday on the back of the falling US dollar and tight global crude supplies, traders said.

They failed to top $100, despite official data which showed that US energy stockpiles fell greater than expected last week.

In early trading on Wednesday, New York’s main contract, light sweet crude for January delivery, rocketed to an historic $99.29. Following the release of data on US energy inventories, the contract stood at 98.19 per barrel, up 16 cents from Tuesday’s close.

In London, Brent North Sea crude for January delivery jumped to an all-time pinnacle of $96.53 per barrel and later stood at $95.76, up 27 cents.

“Oil soared to over $99 a barrel on continued concerns over supply tightness,” Sucden analyst Nimit Khamar said in London.

“However, oil has relinquished those gains... as some looked to take profits after the impressive rally.”

The US Department of Energy (DoE) announced on Wednesday that reserves of US crude oil had sunk by 1.1 million barrels in the week ending November 16.

Oil prices “certainly may rally later on in the session,” Altavest trader Tom Hartmann said after release of the data.

“The market obviously was wrong with expectations of gains in the inventories and it seems there is some hesitation as to which way to push the market.” The DoE added that US reserves of distillates, including crucial heating fuel and diesel, dived by 2.4 million barrels last week.

That was far heavier than market expectations for a drop of 450,000 barrels.

Traders are worried about US energy reserve levels because the United States is the world’s biggest consumer of energy, ahead of number two China.

In the coming months, meanwhile, heating fuel demand was expected to rocket as the northern hemisphere winter stokes demand for distillates.

Crude oil prices have surged by about 64 per cent since the start of 2007, also energised by supply disruptions in key producers such as Nigeria, geopolitical jitters over the Iranian nuclear crisis, and strong demand from China and India.

“The mythical $100 per barrel is of course within reach for today, with or without the help of the weekly statistics,” Petromatrix analyst Olivier Jakob said on Wednesday.

Oil prices were also winning support from a troubled dollar.

A weak dollar encourages demand for commodities like oil, which are priced in the greenback, because they become more attractive to investors using stronger currencies.—AFP