(Updates prices with U.S. crude settlement, details)
By Richard Valdmanis
NEW YORK, June 11 (Reuters) - Crude oil prices on Wednesday
jumped more than $5 to within sight of the record after a
report showed stockpiles in the United States fell sharply for
the fourth week in a row, intensifying worries of a worsening
global crunch.
Weakness in the U.S. dollar and supply problems in OPEC
member Nigeria encouraged the rally, dealers said.
"The big crude draw is obviously bullish, but more
importantly for the oil markets, the dollar is falling and that
could send us back to near $140 a barrel," said Mark Waggoner,
president of Excel Futures in Huntington Beach, California.
U.S. crude oil prices <CLc1> rose $5.07 to settle at
$136.38 a barrel, within reach of last week's record near $140.
London crude <LCOc1> rose $4.45 to $135.47 a barrel.
Oil prices have risen nearly seven-fold since 2002 amid
rising demand from China and other developing countries,
pressuring major consumers like the United States already
hobbled by a housing slowdown and credit crunch.
Representatives of the world's biggest oil consumer and
producer nations will meet in Saudi Arabia June 22 to discuss
the oil spike, which producer group OPEC says is due to
speculation, not a lack of supply. []
U.S. regulators are also slated to meet this week to
discuss oversight of the oil and commodities futures markets
amid pressure from lawmakers who also blame speculators for
inflation in food and energy costs.[]
Wednesday's oil price gains came after the U.S. Energy
Information Administration reported that crude stockpiles
dropped 4.6 million barrels last week, the fourth consecutive
weekly decline amid soft import levels. []
Inventories of crude in the world's biggest energy consumer
have fallen by 7 percent since early May, intensifying concerns
that global oil production is failing to keep pace with rising
demand from developing Asian economies.
"The crude oil draw was a surprise. We just keep dropping
there," said Jim Ritterbusch, president of Ritterbusch &
Associates in Galena, Illinois.
The report comes after the EIA and the Paris-based
International Energy Agency on Tuesday slashed their forecasts
for oil production from non-OPEC nations this year amid steep
field declines and delays in new projects.
The slowing growth in non-OPEC oil production was expected
to keep the world oil market tight even as high prices and
economic turmoil bite into consumption, a factor that led the
EIA on Tuesday to raise its 2008 oil price forecast by 12
percent to $122.15 a barrel.
Dealers said a decline in the U.S. dollar on Wednesday also
encouraged buying. The weak greenback in recent months has
drawn billions of dollars into commodities markets as investors
seek a hedge against inflation.
Oil prices also got a boost from news that Shell Oil
<RDSa.L> was extending its force majeure on oil shipments from
Nigeria through July following a spate of rebel attacks on
facilities earlier this spring.[]
Experts also pointed to figures from the Chinese government
showing a 25 percent year-on-year increase in the nation's
imports of oil in May, which experts said was related to
stockpiling ahead of the Beijing Olympics and increased demand
for fuel after the earthquakes.[]
(Reporting by Richard Valdmanis, editing by Marguerita Choy)
