Crude marks another all time high

Crude prices close above $80 for the first time ever

Crude oil future prices rose today and reached an all time new high. Crude prices closed above $80/barrel after Hurricane Humberto shut three refineries in Texas. Prices also bore the brunt of yesterday’s report by energy Department which showed that crude supplies dropped more than 7 million barrels and motor gasoline inventories fell a sixth week in a row.

For the day ending Thursday, 13 September, 2007, crude-oil futures for light sweet crude for October delivery closed at $80.09/barrel (higher by $0.18/barrel or 0.3%) on the New York Mercantile Exchange.

Futures touched $80.20, the highest intraday price since trading began in 1983. Prices are up 25% from a year ago.

Brent crude oil for October settlement slipped 28 cents (0.4%) to close at $77.40 a barrel on the London-based ICE Futures Europe exchange.

As per yesterday’s weekly inventory report, U.S. crude supplies dropped a third week, down 7.1 million barrels to 322.6 million, for the week ended 7 Sept. Supplies have now dropped 14.5 million barrels from the mid-August level, though they're still up about 1.4% from a year ago.

Motor gasoline supplies fell a sixth straight week, down 700,000 barrels at 190.4 million in the latest week. Distillate stocks were up 1.8 million barrels at 134 million barrels. The decline in gasoline supplies came as U.S. refinery utilization fell to 90.5% of capacity from 92.1% a week ago.

Natural gas at drops but gasoline price perks up

Natural gas in New York fell after a government report showed U.S. stockpiles rose above expectations. Stockpiles rose 64 billion cubic feet (against an expected 61 billion cubic feet) to 3.069 trillion cubic feet in the week ended 7 Sept. Gas for October delivery fell 40.9 cents (6.4%) to settle at $6.029 per million British thermal units.

The International Energy Agency made a modest downward revision to oil demand forecasts yesterday saying it doesn't know how the turmoil from the U.S. subprime-mortgage market will affect demand. The agency sees 2007 oil demand at 85.9 million barrels a day and 2008 demand at 88 million barrels.

Against this backdrop, refinery concerns provided a boost to gasoline prices, with October reformulated gasoline up 3.04 cents to close at $2.0464 a gallon. October heating oil closed nearly unchanged at $2.219 a gallon, retreating from a record intraday level of $2.2347 in electronic trading.

Attacks on oil facilities in Nigeria have curtailed shipments and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.

Earlier this week, OPEC planned to boost daily oil production by 500,000 barrels. OPEC's production target is 27.2 million barrels a day, beginning 1 Nov. OPEC, has decided to raise their daily output by 500,000 barrels per day, starting 1 November.