NYMEX crude crosses $115/bbl on supply fears

17 April 2008 06:18  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures soared to new record highs on Thursday morning in Asia with NYMEX light sweet crude again crossing $115/bbl amid further weakness in the US dollar and concerns over gasoline supplies ahead of the start of the US driving season.

At 04:22 GMT on Thursday, May NYMEX light sweet crude futures were trading at $114.95/bbl, up $0.02/bbl from Wednesday’s settlement price. Earlier, the contract hit a new all time high of $115.21/bbl, up $0.28/bbl.

At the same time on Thursday, June ICE Brent futures were trading at $112.76/bbl, up $0.10/bbl from the previous close, after earlier climbing to a high $112.83/bbl equalling a record high first set on Wednesday.

The US dollar fell to new lows against the Euro on Wednesday, amid concerns over the health of the world’s leading economy.

The low dollar attracted further funds into oil and other commodities as a hedge against in inflation. Meanwhile, oil demand remained supported by growth in Asia and the Middle East.

Supply concerns rose after weekly data from the Energy Information Administration (EIA) revealed a much larger than forecast decline in gasoline stocks of 5.5m bbls and an unexpected drawn down in crude stocks of 2.3m bbls.

Analysts had forecast a build in crude stocks of about 1.5m bbl, but draws on distillate of around 1.6m bbl and on gasoline of around 1.8m bbl. Distillate stocks actually rose by around 100,000 bbls.

Worries over gasoline stocks have been heightened due to the approach of the summer driving season in the US which traditionally starts at the end of May on the Memorial Day public holiday.

The US government said earlier this week that gasoline costs for drivers had hit an all time high of $3.39/gal, up 52.3 cents on a year ago. However the EIA has forecast that summer US gasoline demand will fall for the first time since 1991 due to high prices.

By: James Dennis
+65 6780 4359

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