Falling stocks: Crude reaches new high

Tag : brent crude oil

The price of crude oil last night looked set to test last week'srecord of almost $140 a barrel after reports of falling stocks in the US prompted a fresh wave ofspeculative buying.
In New York , the cost of a barrel of crude in the futures market was up some$6 to more than $137 a barrel following an increase of about $4 inLondon for Brent crude , which closed at almost $135.
The sharp increase in prices followed a report from the USgovernment showing oil stocks had fallen for a fourth week. Itcoincided with reports of fresh supply problems in Nigeria and a25% increase in oil imports in China ahead of this summer's OlympicGames in Beijing. With the weaker dollar also prompting speculativebuying, markets were braced for oil prices to test last Friday'shigh of $139.12 , reached after an $11 surge. Wednesday's gains came after the USEnergy Information Administration reported falling imports meant crude stockpiles dropped 4.6m barrels last week.
Inventories of crude in the world's biggest energy consumer havefallen by 7% since early May, intensified by concerns that globaloil production is failing to keep pace with rising demand fromdeveloping Asian economies.
Oil prices have risen nearly sevenfold since 2002, driven by rising demand from China and otherdeveloping countries.