Oil hits new peak despite U.S. inventories hike

08:24, April 07, 2011      

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U.S. crude oil price rose on Wednesday and hit a new peak since September 2008 on the Middle East tension and a weaker dollar, brushing aside increased U.S. domestic crude inventories last week.

In Libya, battles between Libyan leader Muammar Gaddafi's forces and the rebels continued. In Bahrain, firms have fired hundreds of mostly Shi'ite Muslim workers who went on strike to support pro-democracy protesters.

The European Central Bank is expected to raise interest rates by 0.25 percent on Thursday for the first time since the financial crisis hit. The expectation pushed the euro to a 14-month high but pulled the dollar index lower. A weaker dollar usually lifts oil prices.

On the supply side, members of the Organization of the Petroleum Exporting Countries (OPEC) had no intention to raise output. OPEC said on Wednesday at a conference in Paris they could do little to control prices driven by speculators betting on " worst case scenarios" and said the market had all the oil it needed.

On Wednesday, the U.S. Energy Information Administration reported that crude inventories increased 2 million barrels in the week ended April 1. It was the ninth rise in the last 10 weeks, showing that the U.S. oil supply was not affected by the Middle East unrest. This pressured the market in the earlier trading session.

Light, sweet crude for May delivery added 53 cents to settle at 108.47 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery also soared and last traded above 122 dollars a barrel.

Source: Xinhua
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