Oil hits record high of $78.77 a barrel

Oil hit a new record high above $78 on Wednesday after a larger-than-expected drop in crude inventories in the United States.

U.S. crude rose to an intraday high of $78.77 a barrel, surpassing the previous peak of $78.40 reached in July 2006. The September contract was trading up 31 cents at $78.52 by 1457 GMT.

…Crude oil stocks in the world’s largest energy consumer tumbled 6.5 million barrels, the Energy Information Administration said, surpassing analysts’ expectations for a 700,000 barrel decline.

“These numbers are enough to keep the (crude) rally alive,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Crude oil stocks were lower in every region of the country, including the delivery point at Cushing, Oklahoma, for the New York Mercantile Exchange futures contract.

Reuters