Crude futures climbed past $124 a barrel in electronic trading late afternoon, recovering from earlier weakness as traders continued to have concerns over global supplies, while OPEC commented the market is well supplied.
June crude was last up 76 cents at $124.45 a barrel in electronic trading after reaching a high of $124.57. The contract closed out the regular trading session at $123.69, up 16 cents for the day.
A report from the Energy Department on Wednesday showed that U.S. refinery capacity declined, but crude supplies rose more than expected by 5.7 million barrels to 325.6 million for the week ended May 2.
The Organization of Petroleum Exporting Countries' general secretary Abdalla el-Badri said today ``There is clearly no shortage of oil in the market,'' according to a statement from the group's headquarters.
Analysts commented a lot of the gains in crude are due to declines on the dollar. Today, the dollar was trading lower against major currencies on Thursday and the dollar index which tracks the performance of the dollar against major currencies fell 0.3 percent to 73.31.
A falling dollar triggers investors to buy commodities as a hedge against inflation. It also makes commodities such as gold and crude denominated in dollars, cheaper for foreign buyers.
Also today the deputy chief of the International Monetary Fund said inflation is reemerging as a threat to economic stability.
Brent crude for delivery in June climbed 27 cents or 22 percent to $122.12 a barrel on the London ICE Futures Exchange today.