NEW YORK — Crude futures made their first foray past US$115 Wednesday, propelled to a new record by concerns about how much gas will be available during the peak summer months.
Inventories of gas fell by 5.5 million barrels last week, according to the Energy Department’s Energy Information Administration, a much bigger decline than forecast by analysts surveyed by Dow Jones Newswires. Light, sweet crude for May delivery responded by rising as high as $115.07 on the New York Mercantile Exchange, and later settled up $1.14 at a record $114.93 a barrel.
The report said crude inventories fell by 2.3 million barrels last week, compared to the gain analysts expected.
Oil prices were also boosted by the falling U.S. dollar, which declined to a new low against the euro on Wednesday. Many investors buy commodities such as oil as a hedge against inflation and a falling greenback. A weaker U.S. dollar also makes oil cheaper to investors overseas.
But the market was torn and traded sharply lower at times due to data deeper in the report showing that the country’s appetite for increasingly expensive gas is declining.
“Demand for gasoline is terrible,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. Gas demand has fallen an average of one per cent each of the last four weeks compared to the same period last year. “Demand should be rising this time of year.”
Still, May gasoline futures rose 5.8 cents to settle at a record $2.939 a gallon on the Nymex after earlier rising to a trading record of $2.9427.
The average price of a gallon of diesel in the United States, meanwhile, rose a cent to a record $4.129 a gallon, the survey showed. High prices for diesel — used to fuel most trucks, trains and ships — is a large part of the reason food prices are rising.