Crude oil prices hit $102 a barrel
NEW YORK (AP) Crude prices spiked above $102 a barrel for the first time Wednesday but retreated after the government said stockpiles of crude oil and gasoline rose far more than expected last week.Prices nonetheless remained within range of Tuesdays record close as a weak dollar and U.S. economic worries drove more money into energy futures as a hedge against inflation.Light, sweet crude for April delivery fell 61 cents to $100.27 on the New York Mercantile Exchange shortly after the inventory figures were released, after surging as high as $102.08 a barrel in electronic trading earlier. The contract on Tuesday jumped $1.65 to settle at $100.88 a barrel, a record close.The report by the Energy Departments Energy Information Administration showed U.S. crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels. Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires.Although the report suggests supplies are rising, oil prices are not certain to stay negative, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.The initial response to the downside from this report could be easily reversed by days end, he said.Gasoline inventories jumped by 2.3 million barrels, or 1 percent, to 232.6 million barrels. Analysts expected gasoline stockpiles to rise by a more modest 400,000 barrels.The dollar slumped to a new low against the euro, reaching $1.51 and pushing investors to oil and other commodities as a hedge against inflation. For the time being, investors are ignoring the plentiful supplies of oil.Gasoline prices at the pump jumped a penny overnight, rising to an average of $3.152 from $3.142, according to AAA and the Oil Price Information Service. A year ago, drivers were paying an average of just $2.37 for a gallon of gas.Negative economic news continued Wednesday when the Commerce Department reported that new factory orders for big-ticket manufactured goods tumbled 5.3 percent in January. The worse-than-expected drop was the indicators biggest decline in five months.On Capitol Hill, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.Crude has cracked through the $100 level again and thats driven by financial investors moving money into commodities markets, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. We are therefore seeing these strong prices that have really little to do with oil market fundamentals, he said.The Schork Report, edited by Stephen Schork, also attributed part of the climb to the weakness of the U.S. currency, noting, outside of the dollar woes, there is no other reasonable driver behind this move.In London, Brent crude fell 37 cents to $99.10 a barrel on the ICE Futures exchange, below the intraday record of $100.30 a barrel set earlier in the session.In other Nymex trading Wednesday, heating oil futures fell more than 2 cents to trade at $2.7887, while gasoline futures fell by 5.78cents to $2.4927.Natural gas futures lost more than 13 cents, fetching $9.069 per 1,000 cubic feet.
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