Oil hits new record on supply concerns

NEW YORK – Oil prices rose to a new record settlement price Tuesday as traders turned their attention to a government inventory report expected to show tight supplies and shrugged off OPEC’s decision to boost output.

Even factoring in OPEC’s decision to increase oil production by 500,000 barrels per day starting Nov. 1, “supplies are tight,” said Addison Armstrong, an analyst at TFS Energy Futures LLC.


And according to analyst predictions, they’re going to get even tighter. Analysts surveyed by Dow Jones Newswires, on average, expect Wednesday’s report from the Energy Department’s Energy Information Administration will say that crude oil inventories fell by 2.7 million barrels in the week ended Sept. 7.

Investors had already priced in OPEC’s increase, and many were looking for a larger production boost, analysts said.

Light, sweet crude for October delivery rose 74 cents to settle at $78.23 a barrel on the New York Mercantile Exchange after alternating frequently between gains and losses. The settlement price bested the previous record, set July 31, by 2 cents.

AP