Crude oil futures hit record high on lower stocks

by Ron Sterk
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NEW YORK — Nearby September crude oil futures at the New York Mercantile Exchange (NYMEX) settled at a record high $78.21 a barrel on July 31 and followed with a record intraday high of $78.77 the next day.

The new record price for light, sweet crude oil eclipsed the previous record high settlement of $77.03 and intraday high of $78.40, both set on July 14, 2006, amid tensions in the Middle East.

Traders attributed the price increase to anticipation of reduced U.S. crude oil inventories as the result of increased use by U.S. refineries to produce more gasoline. The kidnapping of a foreign worker in Nigeria, the world’s sixth largest oil supplier, also was cited for pushing prices toward the record high.

The U.S. Energy Information Administration of the U.S. Department of Energy said Aug. 1 that U.S. crude oil stocks on July 27 were 344.5 million barrels, down 6.5 million from a week earlier but still 12.6 million more than a year ago. Traders had expected a decline of less than 1 million barrels from the previous week.

Despite the record high intraday price, September crude oil futures settled $1.68 a barrel lower at $76.53 on Aug. 1 as traders took into consideration increased supplies of refined products.

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