Oil prices increase to $133 per barrel
Gas prices in some parts of Ohio have reached $3.99.
NEW YORK (AP) — Runaway oil prices blew past $130 a barrel for the first time Wednesday and kept going, while gasoline prices persisted in their own relentless climb, rising above $3.80 a gallon. Supply worries, rising demand and a slumping dollar are conspiring to make filling up the car — and paying for just about everything else — a growing burden for Americans.
With gas and oil prices setting new records on a daily basis, many analysts are beginning to wonder whether anything can stop prices from rising. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude’s rally.
Oil’s Wednesday rally was fed in part by a report from the Energy Department’s Energy Information Administration, which said crude inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase.
Light, sweet crude for July delivery rose $4.19 to settle at $133.17 a barrel on the New York Mercantile Exchange, but prices rose as high as $133.82 in after-hours electronic trading. It was crude’s largest one-day price advance since March 26.
Investors seized on the inventory report to boost prices Wednesday, but traders interested in pushing prices higher are increasingly picking and choosing which news they wish to pay attention to, analysts say.
“Even if this report was bearish, with the momentum the way it is right now, it wouldn’t matter,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Crude prices first passed $130 overnight on concerns about demand and a weaker dollar. Analysts say crude has been boosted in recent days by especially strong demand for diesel in China, where power plants in some areas are running desperately short of coal and certain earthquake-hit regions are relying on diesel generators for power.
Gasoline prices at many Ohio service stations have jumped into the shadow of $4 a gallon, just before the Memorial Day holiday weekend.
Web sites where consumer spotters post prices indicate regular gas spiked to $3.99 Wednesday morning at pumps all over the state.
The current AAA statewide average is about $3.85 for a gallon of regular, but that’s based on data from Tuesday. The survey is updated overnight.