NEW YORK (AP) - Oil futures rose to a new trading high above $84 a barrel on Friday—and settled at a new record—on concerns that supplies are not adequate to meet fourth-quarter demand. Recent reports have indicated that crude inventories are falling. Thursday's Energy Department report showed that domestic oil supplies declined last week, and an International Energy Agency report on Thursday concluded that oil inventories held by the world's largest industrialized countries have fallen below a five-year average."This is a concern," Stephen Schork, a trader and analyst in Villanova, Pa., said in a research note. "Despite relatively weak demand ... crude stocks still fell last week."
Energy Secretary Samuel Bodman appears to agree, stating Friday that high prices are being driven by fundamental supply and demand imbalances, not speculative investing.
Light, sweet crude for November delivery rose 61 cents to settle at a record $83.69 a barrel on the New York Mercantile Exchange after rising as high as $84.05, also a record. Despite the gains, oil is still below inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
Some analysts think the supply shortfall in this week's Energy Department inventory report are an anomaly. They doubt demand is as strong as recent forecasts by the Energy Department and the IEA suggest. These analysts expect oil prices will soon begin a seasonal decline to $70 a barrel, or lower.