Crude Oil Jumps to a Record as Demand May Exceed Production

Global oil use will rise to 86.4 million barrels a day in the fourth quarter, 200,000 barrels more than forecast a month earlier, an International Energy Agency report showed this week. World oil production averaged 83.8 million barrels a day in the first quarter. U.S. crude-oil supplies fell 4.9 million barrels in the last two weeks, Energy Department figures show.

“It seems kind of surreal, but here we are,” William Wallace, a Nymex floor trader for MAN Financial Inc., said after the close of trading today. “There’s no disruptions, there’s no geopolitical stuff,” to account for recent gains.

Crude-oil prices are likely to reach $70 barrel now that they have breached the record, said John Murphy, chief technical analyst at StockCharts.com. Oil futures in New York have exceeded the 200-day moving average since a dip in May. That suggests a 70 percent to 80 percent chance of oil’s reaching $70, said Murphy.

Bloomberg