Oil prices hit all-time high

Source: Exec Digital USA

Date :10/04/2008 04:08:02

Oil prices reached a record high figure of $112.21 a barrel yesterday after the shock announcement that US crude oil inventories had declined sharply.

The Department of Energy announced yesterday morning that US crude oil stocks had dropped by 3.2 million barrels for the week ending April 4, against an original forecast estimating an increase of 2.5 million barrels.

The DoE added that gasoline supplies fell by 3.4 million barrels, while stocks of distillates sank by 3.7 million barrels. These figures are both in excess of analyst predictions.

“The plunge [of middle distillates] cut stockpiles back to below their five-year average for distillates and to near-average levels for crude, while earlier gasoline stock builds continued to whittled down despite weak demand,” said New Edge analyst Antoine Halff.

This news has caused a surge in crude oil prices worldwide, with prices underpinned yet further by ongoing weakness in the US dollar. This has continued to encourage investment into commodities, experts say.

Additionally, investors have bought into commodities to an increasing extent to act as a hedge against inflation.

Yesterday the IMF cut growth forecasts for the year to 3.7 percent from 4.1 percent, alongside predicting a recession for the US economy. Forecasts were cut for the US, UK and euro zone, with the IMF indicating the possibility of a global recession before 2010.

April 10, 2008