So much for all of those news reports I saw about oil prices dropping after Labor Day, and while we're at it, so much for OPEC's decision to hike output by 500,000 barrels. The increase caused nary a waver in the price of black gold, especially after the latest inventory updates. According to the Energy Department, crude supplies dropped 7.1 million barrels to 322.6 million, not just a sizeable drop, but a third-straight drop as well. Since mid-August crude supplies have shed 14.5 million barrels, but are still up 1.4% from a year ago. The sizeable drop was confirmed by the American Petroleum Institute (API), which reported a decline of 5.2 million barrels. This drop brings the API's total to 321.5 million. Elsewhere, the Energy Department reported a drop of 700,000 barrels of motor gasoline. Since late July, gas supplies have shed 14.3 million barrels. The API did report an increase of 3.3 million barrels in gasoline supply, bringing stockpiles to 200.2 million barrels. In the wake of this report, October crude shot to an all-time high of $79.20 per barrel, 50 cents better than the previous front-month record hit on August 1.
John Person of NationalFutures.com was quoted in a MarketWatch article, noting that today's record was hit without an actual supply disruption from a major hurricane weather event and that the market did not flinch toward OPEC's news. Person also speculated that any rate cut from the Fed could spark demand for gasoline, and posited that we could see prices above $75 throughout the next month thanks to prospects for a colder winter.