The Energy Department today reported a surprise decline in U.S. crude inventories, sending December crude-oil prices surging to a new record high.
Despite analysts' predictions of a 1.25 million-barrel gain, crude supplies fell by 3.9 million barrels to 312.7 million barrels in the week ending October 26. As a result, oil futures dashed more than 3% higher during intraday trading, marking a new all-time high of $94 a barrel. Some analysts are now predicting crude to hit $100 within the next 2 weeks.
The Energy Department also reported a 1.3 million-barrel rise in gasoline supplies and an 800,000 barrel rise in distillate stocks. On NYMEX, reformulated gasoline for November gained more than 2.5% a gallon, while November heating oil and December natural gas both rallied more than 2% a gallon.
In related news, unless you've been under a rock for the past week, the results of the Federal Open Market Committee meeting are slated to be announced this afternoon. If the Fed decides to cut the interest rate, a further muscling in oil prices could occur.