Oil price hits record US$65 a barrel

11-Aug-05

A record breaking rally in prices came after the Department of Energy (DoE) reported that US stockpiles of gasoline inventories fell last week. A blend of sky rocketing demand for crude, outages at stressed refineries and tensions in Middle East have sent oil prices up by a staggering US$1.83 from Tuesday, to US$65 a barrel. New York's main contract, light sweet crude for delivery in September, closed at US$64.90 a barrel, shortly after reaching US$65.00. In London, Brent North Sea crude for delivery in September was up to break through US$64 a barrel for the first time. The contract rose 2.12 dollars to end at 64.10 dollars a barrel. However, US inventory of crude posted a surprising increase in the week to August 5, jumping by 2.8 million barrels, distillate products, including heating oil, rose by 2.6 million barrels. But gasoline (petrol) reserves fell by 2.1 million barrels over the week. This build in crude can be attributed to a rise in crude imports that reached an average 11.1 million bpd over the week, and lower refinery utilisation. The security concerns in the Middle East and disruptions to overwhelmed refineries in the United States and Europe.