New York oil price flirts with record as US energy reserves dive
NEW YORK (AFP) — The price of oil in New York rose briefly above 77 dollars on Thursday, within reach of a record high, as reports of weaker US energy reserves heightened supply concerns.
The New York benchmark contract, light sweet crude for October delivery, rose 57 cents to close at 76.30 dollars a barrel after trading as high as 77.43 dollars.
That was not far off the record high of 78.77 dollars which was hit on August 1.
In London on Thursday, the price of Brent North Sea crude for October delivery advanced 43 cents to settle at 74.77 dollars per barrel, after earlier hitting 75.70 dollars, which was last seen on August 3.
The US Energy Information Administration revealed Thursday that American crude reserves tumbled by 3.9 million barrels in the week ending August 31.
That was far heavier than analysts' consensus forecasts of a drop of 2.2 million barrels.
American gasoline inventories, meanwhile, sank by 1.5 million barrels.
"We're still seeing (US) crude stocks draw," said Global Insight analyst Simon Wardell.
He added that the data was "on the bullish side if anything."
The weekly US report -- published one day later than normal due to Monday's public holiday in the United States -- has stoked market jitters about the strength of global energy supplies going forward.
"I think oil prices are going to retest recent record highs," added Bank of Ireland analyst Paul Harris.
Mike Fitzpatrick at MF Global said the oil market is focusing on supply issues and does not appear to be concerned about softening economic conditions that might hurt demand.
"It is particularly impressive that crude oil was able to shake off yesterday's weak economic news and sharp sell off in the equities," he said.
"The apparent disconnect between energy and the stock market should be a clear indication that energy markets, while abiding at times of macro issues, are more concerned with supply issues than a possible softening in demand, at this point."
Elsewhere, prices were also supported by supply threats from geopolitical tensions and expectations that OPEC will refrain from increasing output quotas at its meeting next Tuesday.
Syria said its air defences opened fire on Israeli warplanes which had violated Syrian airspace at dawn on Thursday, ratcheting up tensions between the neighboring foes in the oil-rich Middle East region.
Elsewhere, the market was tracking the threat to energy facilities from the ongoing Atlantic hurricane season. The season's hurricanes so far have spared oil installations, although Mexican production has endured interuptions from the storm threats.
Traders are also looking ahead to next week's OPEC meeting in Vienna.
OPEC member Iran on Wednesday indicated it was against any increase in the cartel's production quota.
At its last regular meeting in March, the Organization of the Petroleum Exporting Countries decided to keep its official production quota at 25.8 million barrels of oil per day.
World oil prices had shot up Tuesday after Qatar's energy minister said OPEC would not move next week to increase the cartel's oil output, despite calls for the organization to respond to tight global supplies and strong energy demand.
