LONDON, May 21: The price of oil rocketed to a record high $132.08 a barrel on Wednesday as official data revealed unexpected declines in US energy inventories amid increasing Chinese demand, analysts said.

New York light sweet crude struck the all-time pinnacle just a few hours after breaking through $130 for the first time.

“Fundamentally, the crude prices are being supported by concerns over gasoline supplies ahead of the US driving season and on increased demand for diesel from China as they look to boost supplies ahead of the Olympics and after last week’s earthquake,” said Sucden analyst Nimit Khamar.

In London on Wednesday, Brent North Sea crude reached a record high of $131.57 a barrel.

Crude futures have soared by almost a third in value since the start of 2008, when they breached $100 for the first time.

Oil prices are also surging because of a weak dollar, which makes commodity prices in the US currency cheaper for foreign buyers.

Speculators are additionally diving into the crude oil market owing to geopolitical unrest in oil-producing nations, notably Nigeria and Iran, and in response to Opec’s unwillingness to increase production, analysts added.

After spiking to a fresh height on Wednesday, New York’s main oil futures contract, light sweet crude for July delivery, stood at $131.56 a barrel, up by $2.58 on Tuesday’s close.

Brent North Sea crude for July was up $3.27 at $131.11.

The market was digesting the latest weekly snapshot of energy inventories in the United States the world’s biggest consumer of oil.

The US Department of Energy said that crude stockpiles had slumped by 5.4 million barrels last week.—AFP