Oil prices climb above US$51 a barrel

27-May-05

Crude futures climbed above US$51 a barrel on Thursday after the U.S. government reported a decline in the nation's crude inventories. Inventories fell 1.6 million barrels to 332.4 million barrels in the week ending May 20 from the previous week as per the U.S. Energy Information Administration's midweek petroleum data. Light, sweet crude for July stood at US$51.13 on the New York Mercantile Exchange Crude. This report was just the second decline in 15 weeks. This current rally in prices is being termed by many as a "short-term reaction" to the results of the U.S. report, overlooking the healthy increase in crude stocks in the past months. Even at these levels, oil prices are about US$7 lower than their all-time high of US$58.28 as on April 4. Comments from key Organization of Petroleum Exporting Countries about possibly reducing production have also lent some support to rising prices.