Oil at record over $115 on U.S. supply, dollaradmin
Oil set a record above $115 a barrel on Thursday as a drop in U.S. gasoline inventories raised concern of tighter supply and a weak dollar boosted investor demand for commodities.
A U.S. government report on Wednesday showed a surprise drop in crude inventories and a larger-than-expected decline in stocks of gasoline. Demand for the motor fuel usually peaks in the summer.
“Summer driving season is approaching. And even in a recessionary economy, seasonal gasoline demand will pick up, which adds to stress on the global oil supply chain,” said Jan Stuart at UBS.
“But before we get there, the stress already put onto the supply chain globally by middle distillate demand and supply dynamics is not still abating,” he said in a research note.
U.S. crude set a record of $115.54 a barrel and by 5:58 a.m. EDT was trading at $115.24, up 31 cents. Oil has hit new peaks for three consecutive days. London Brent set a record of $113.38.
London’s gas oil, the benchmark for heating oil and diesel in Europe, set the pace for crude oil and refined product futures, gaining 1.1 percent to $1,056.25 a tonne.
In the latest indication of strong demand for middle distillates, China’s top refiners were set to extend unusually high imports into a sixth straight month.
PetroChina, China’s second-largest refiner, has bought 300,000 tonnes of gas oil for May, traders said.
The weakness of the dollar continued to attract investors into commodities to hedge against inflation and bet oil’s rally would help compensate for the shrinking value of dollar assets in their portfolios.
The euro hit a record high against the dollar on Thursday.