Crude oil, gasoline and heating oil surged to records after a government report showed that U.S. supplies dropped.
Crude oil inventories fell 3.15 million barrels to 316 million last week, the Energy Department said. A 2.3-million- barrel gain was forecast, according to a Bloomberg News survey. Metals futures also rose as the dollar fell against the euro, and gasoline pump prices reached a record average $3.343 a gallon.
``This reaction to the DOE numbers suggests that the supply and demand fundamentals are still important,'' said Adam Sieminski, Deutsche Bank's chief energy economist in Washington. ``It's not just the speculators that are driving prices higher.''
Crude oil for May delivery rose $3.33, or 3.1 percent, to $111.83 a barrel at 1:11 p.m. on the New York Mercantile Exchange. Futures reached $112.21, the highest since trading began in 1983. The previous record of $111.80 a barrel was reached on March 17.
Gasoline for May delivery climbed 4.59 cents, or 1.7 percent, to $2.7963 a gallon. Futures reached $2.8228, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
U.S. pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 1.2 cents to the record, AAA, the nation's largest motorist organization, said today on its Web site. Diesel prices rose 1.2 cents to $4.032 a gallon, AAA said. Diesel pump prices reached a record $4.037 on March 22.
Refinery Operations
Refineries operated at 83 percent of capacity last week, down from 88.4 percent a year earlier, the Energy Department report showed. Refiners operated at 82.2 percent in the week ended March 21, the lowest since October 2005.
``The report is supportive across the board,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``I'm surprised gasoline isn't up more because of the larger-than-expected drop in inventories.''
Supplies of gasoline and distillate fuel, including heating oil and diesel, also fell. Gasoline inventories dropped 3.44 million barrels to 221.3 million last week, the report showed. A 3-million-barrel decline was expected.
Crude-oil supplies last week were 0.1 percent above the five-year average for the period, the department said. A week earlier stockpiles were 1.8 percent higher. Gasoline inventories were 7.9 percent above the five-year average, compared with 9.1 percent above a week earlier.
Heating oil for May delivery rose 12.43 cents, or 4 percent, to $3.2345 a gallon in New York. Futures touched $3.2434, the highest since trading began in 1978.
Supplies of distillate fuel fell 3.7 million barrels to 106 million last week, the report showed. A 1.5 million barrel decline was forecast.
Fuel Demand
``Domestic demand isn't great but that's not important,'' said Antoine Halff, head of energy research at New York-based Newedge USA LLC. ``Global demand is still growing and that's what matters.''
Total implied U.S. fuel demand averaged 20.5 million barrels a day in the past four weeks, down 0.4 percent from a year earlier, according to the department. Consumption was down 2.2 percent from a year earlier in the four weeks ended March 21.
``Speculation is the main reason driving up oil prices,'' Qatari Energy Minister Abdullah bin Hamad al-Attiyah said today in Beijing. ``OPEC so far doesn't have anything on the agenda for the informal meeting in Rome.''
OPEC Meeting
The Organization of Petroleum Exporting Countries will hold its next formal policy-setting conference in September. Many OPEC ministers will hold informal discussions during a conference in Rome on April 20-22. The group's 13 members produce more than 40 percent of the world's oil.
``OPEC has lost control of the oil market to institutional investors who are looking for a sanctuary from the weak dollar and slowing economy,'' said Richard Chimblo, manager of global business development at Calgary-based Genoil Inc. ``I believe the bubble will break and prices are going to fall to the $85 area before the winter heating season.''
Oil's 81 percent gain during the past year is the second biggest among 19 commodities on the Reuters/Jefferies CRB Index, trailing only wheat, which doubled. Rising global demand for raw materials and a weakening dollar have led to record prices this year for raw materials including corn, rice, gold and platinum.
Brent crude for May settlement rose $2.76, or 2.6 percent, to $109.10 a barrel on London's ICE Futures Europe exchange. Futures reached a record $109.21 a barrel in intraday trading.
``It looks like this move will accelerate and prices will move toward $115,'' said Tom Bentz, a broker at BNP Paribas in New York. ``This is all part of the big uptrend, and where it stops nobody knows.''
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