Crude prices settle above $80

Crude prices close rise on anticipation that oil and gasoline inventories extended declines

Crude oil future prices once again rose today and reached another all time new high. Crude prices closed above $80/barrel for the second time after traders continued with their speculation that U.S. oil and gasoline stockpiles extended declines as refiners slowed operations.

For the day ending Monday, 17 September, 2007, crude-oil futures for light sweet crude for October delivery closed at $80.57/barrel (higher by $1.47/barrel or 1.9%) on the New York Mercantile Exchange.

The contract had dropped to a low of $78.80 early in the session but then rebounded as high as $80.70

The weekly report by Energy Department is expected to show U.S. oil stockpiles fell 2 million barrels last week, the 10th decline in 11 weeks. This perked up prices today. Prices also got a boost that an interest rate cut tomorrow by Federal Reserve will boost energy demand across the country.

Earlier last 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.

Goldman Sachs says oil will reach $85 by year end

Natural gas rose in New York to the highest in a month amid speculation hedge funds would increase purchases, driving up prices in the fourth quarter. Gas for October delivery rose 37.4 cents (6%) to settle at $6.653 per million British thermal units.

Against this backdrop, October reformulated gasoline added 0.78 cent to close at $2.0442 a gallon, while heating oil for October delivery added 2.09 cents to end at $2.2287 a gallon.

Today, Goldman Sachs said its analysts raised their year-end forecast for oil prices to $85 a barrel for 2007 and pegged the year-end price at $95 a barrel for 2008.

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.