(Xinhua)
Updated: 2007-09-13 15:35

NEW YORK -- Crude oil futures prices traded above US$80 a barrel for the first time Wednesday on shrinking US inventories and storm concerns.

Secretary General of the OPEC conference Abdalla Salem El-Badri from Libya speaks during a news conference after a meeting of oil ministers of the Organization of the Petroleum Exporting countries at the OPEC's headquarters in Vienna, on Tuesday, Sept. 11, 2007. [AP]

Light, sweet crude for October delivery rose as high as US$80.18 a barrel on the New York Mercantile Exchange before it settled at US$79.91 per barrel. The former intraday high for a front-month contract was US$78.77 a barrel, set on August 1. The former highest-ever settlement price for a front-month contract was US$78.23 a barrel, which was set on Tuesday.

Unexpected decline in US inventories

"It was very clear for some time now that the demand supply imbalance would have driven oil to US$80 per barrel. However, the catalyst today for the actual achievement of that milestone was among other things, the unexpected decline in inventories as conveyed by this morning's report by the US Department of Energy," Wall Street Strategies' senior research analyst Conley Turner told Xinhua.

Crude prices surged Tuesday morning right after the Energy Information Administration reported a huge draw on the nation's crude inventories.

Crude stockpiles sank by 7.1 million barrels last week, while gasoline inventories fell by 700,000 barrels. Analysts surveyed by Dow Jones Newswires had expected crude oil inventories fell 2.7 million barrels while gasoline inventories fell 500,000 barrels last week.

Crude imports fell by 674,000 barrels a day on average last week to 9.56 million barrels, while gasoline imports fell an average of 298,000 barrels a day to 1.02 million barrels a day.

Demand for gasoline averaged about 9.6 million barrels a day over the last four weeks, about 0.9 percent above last year.

Storm concerns and weak dollar

"The National Hurricane Center has stated that a tropical storm named Humberto has formed off the coast of Texas and another depression has formed in the Atlantic. These have the potential to impact offshore oil producing facilities in the Gulf of Mexico," said Turner.

Tropical storm Humberto formed Wednesday in the Gulf of Mexico and rain was already falling along the Gulf Coast with Humberto's center still about 70 miles south-southwest of Galveston, Texas, the National Hurricane Center said.

Another tropical depression also formed Wednesday far in the open Atlantic, about 1,130 miles east of the Lesser Antilles. It had maximum sustained winds near 35 mph and was moving west-northwest at about 12 mph. Forecasters said it could become a tropical storm later Wednesday.

      1   2     

      1   2