NEW YORK - Oil futures rose to a new record over $100 a barrel Thursday after the government reported a larger-than-expected decline in crude oil inventories and an unexpected rise in heating oil supplies.
One day after oil prices briefly touched $100 for the first time, the Energy Department’s Energy Information Administration said crude inventories fell by 4 million barrels last week, much more than the 1.7 million barrel decline analysts surveyed by Dow Jones Newswires, on average, had expected.
On the other hand, inventories of distillates, which include heating oil and diesel fuel, rose by 600,000 barrels, countering analyst expectations that distillate supplies would fall by 600,000 barrels. And supplies of gasoline rose by 1.9 million barrels, more than the 1.3 million-barrel increase analysts had expected.
Light, sweet crude for February delivery fell 27 cents to $99.35 a barrel on the New York Mercantile Exchange after earlier rising to $100.09, a trading record. Prices fluctuated in light trading as investors struggled to interpret the EIA data.
Here is a graph showing the rise in oil prices since August 2007:
Graph showing price of light, sweet, crude oil prices. From StockCharts.comAccording to this daily graph, oil prices have been going up since August 2007, and have been hovering within the $90 dollar range since November. It was only a matter of time before oil would hit $100 a barrel. If this trend of price increases on oil continues, we could be seeing oil rising well above $100 a barrel throughout 2008--especially if the Bush administration decides to attack Iran, or if even greater violence takes place in the Iraq. We could be seeing even higher energy and gas prices throughout this year, or at least having oil hovering between $90 to $100 dollar range.
And this will not be good to have the issue of high energy prices taking stage in this 2008 presidential election, especially with our current failed GOP president George Bush residing in the White House.
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