Crude oil continued its march to new records on Thursday, settling above $83 on a plunging dollar and concerns about a brewing storm in the Gulf of Mexico.
Crude oil for delivery in October on the New York Mercantile Exchange gained $1.39, or 1.37 percent to settle at $83.32 per barrel, the fourth straight record close. October contracts expiring today also added to the gains. London Brent crude settled up 62 cents at $79.09 a barrel.
Oil prices, have been rising steadily this week, spurred on by a decision by the U.S. Federal Reserve to lower its benchmark interest rate by half a percentage point. The policy move scared off investment in U.S. dollars toward more desirable investments including commodities such as oil and gold.
A weaker dollar can also allow foreign investors with stronger currencies to get more dollar-denominated assets at cheaper prices.
Meanwhile, a storm brewing in the Gulf of Mexico added to supply pressure as offshore oil and gas operators evacuated some personnel, idling 28 percent of total output there, or 360,000 barrels per day.
Also adding to upward price pressure, a government report released yesterday said U.S. crude stockpiles dropped nearly twice what analysts had expected last week.
The Department of Energy said inventories fell by 3.8 million barrels to 318.8 million for the week ending September 14. Supplies have fallen for 10 of the last 11 weeks.