New York Crude Oil Rises to US$25 a Barrel, First Time Since January 1997
By Mark Pittman
Crude Oil Rises to $25/Bbl After Inventories Fall (Update3)
(Adds Goldman Sachs index in 5th paragraph, details on
inventories in 8th-9th paragraphs.)
New York, Sept. 29 (Bloomberg) -- Crude oil rose 3 percent,
climbing above $25 a barrel for the first time in 2 1/2 years,
after a report of declining inventories signaled that an oil
surplus is gone.
U.S. crude oil supplies fell 1.1 percent to the lowest level
since January 1998, the American Petroleum Institute said.
Inventories have declined every week but two since mid-June, as
exporters reduced production by about 7 percent. Prices have more
than doubled this year.
``We are fundamentally short of oil,' said Alan Struth, an
economist at Honeywell Bonner & Moore, a Houston-based refinery
consulting firm. ``If production stays around where it is, we
could see $30 by the end of the year.'
Crude oil for November delivery rose as much as 79 cents, or
3.3 percent, to $25.12 a barrel on the New York Mercantile
Exchange, the highest price since January 1997. Oil was recently
up 60 cents at $24.93 a barrel.
The energy-weighted Goldman Sachs Commodity Index rose 2.31
to 194.24. A close there would be the highest level since
November 1997.
The Standard & Poor's index of integrated international oil
companies was the best performing industry group in the S&P 500.
Exxon Corp. rose 1 11/16 to 76 3/8 and Mobil Corp. rose 2 5/16 to
100 3/16.
U.S. oil inventories fell to 305.1 million barrels last
week, the API said after trading yesterday. Inventories have
averaged 319 million barrels over the past five years. U.S.
supplies have fallen 11 percent from their high for the year in
April.
Gasoline inventories fell to 201.1 million last week, the
lowest level since October 1998 and down 9.3 percent from this
year's high in March.
The rally in crude oil may last another six weeks, sending
prices close to $28 a barrel, according to a survey of analysts
and traders by Bloomberg News.
The average of eight analysts surveyed last week predicted
that crude oil will top out at $27.63 a barrel on Nov. 17. The
analysts expect prices to fall back by Jan. 1, to $23.91 a
barrel, which is still more than double a 12-year low of $10.35 a
barrel in December 1998.
The drop in gasoline inventories came as demand rose to 9.4
million barrels a day, its seventh-highest level ever, according
figures derived from the API report.
Gasoline for October delivery rose as much as 1.25 cent, or
1.7 percent, to 74.00 cents a gallon on the Nymex. Heating oil
for October delivery rose as much as 1.07 cents, or 1.7 percent,
to 62.75 cents a gallon.
In London, November Brent crude oil rose 54 cents, or 2.3
percent, to $24.30 a barrel, on the International Petroleum
Exchange.
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