Oil Rises Above $134 on U.S. Supply Drop

Crude oil rose to a record above $134 a barrel as U.S. stockpiles unexpectedly dropped and banks raised price forecasts because of supply constraints and demand growth.
TradingEconomics.com, Bloomberg 5/21/2008 9:52:24 AM

Supplies fell 5.32 million barrels to 320.4 million last week, the biggest drop in four months, the Energy Department said. Oil for December 2016 delivery rose more than $19 a barrel, or 16 percent, after Goldman Sachs Group Inc. on May 16 raised its outlook to $141 a barrel for the second-half of the year.

Crude oil for July delivery rose $2.59, or 2 percent, to $131.57 a barrel at 11:27 a.m. on the New York Mercantile Exchange, after reaching $132.08. Prices have almost doubled from a year ago.

Brent crude oil for July settlement rose $2.90, or 2.3 percent, to $130.74 a barrel on London's ICE Futures Europe exchange. The contract touched $131.57 today, the highest since trading began in 1988.

The supply decline left inventories 0.9 percent below the five-year average for the week, the Energy Department said. Stockpiles were 0.8 percent above normal a week earlier.

Imports fell 7 percent to 9.24 million barrels a day, the report showed. Imports have averaged 9.86 million barrels a day so far this year, down 0.9 percent from the same period last year, according to department figures.