Oil Above $96 on Drop in US Supplies

Oil Prices Rise to Record Above $96 a Barrel After Surprise Drop in US Supplies SINGAPORE (AP) -- The price of oil rose to a new record above $96 a barrel Thursday after a surprise drop in U.S. crude stockpiles raised concerns about supplies for coming winter demand. Other energy futures also gained.

The U.S. Federal Reserve's move to cut interest rates by a quarter percentage point also supported prices.

It was the second week in a row the U.S. Energy Information Administration reported a sharp and unexpected drop in oil inventories.

"The decline in U.S. crude oil inventories has been a key driver of oil prices," said David Moore, commodity strategist at the Commonwealth Bank of Australia in Sydney.

Light, sweet crude for December delivery rose as high as $96.24 a barrel in electronic trading on the New York Mercantile Exchange by late morning in Singapore. Prices later receded to $96.05 a barrel.

Crude prices have reached inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to more than $101 today.

"We are stepping into an unknown area. Nobody wants to sell (given the fear of a) further rise," broker Ken Hasegawa of Fimat Japan told Dow Jones Newswires.

The December Nymex crude contract rose $4.15 Wednesday to a record settlement price of $94.53 a barrel.

Source: Yahoo Finance

Label: Oil Price, Federal Reserve, New York Mercantile Exchange

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