Oil Rises Above $134 on U.S. Supply Drop, Bank Price Forecasts

(Bloomberg) — Crude oil rose to a record above $134 a barrel as U.S. stockpiles unexpectedly dropped and banks raised price forecasts because of supply constraints and demand growth.

Inventories fell 5.32 million barrels to 320.4 million last week, the biggest drop in four months, the Energy Department said. Oil for December 2016 delivery rose more than $20 a barrel, or 17 percent, after Goldman Sachs Group Inc. on May 16 raised its outlook to $141 a barrel for the second-half of the year.


“What we have here is a situation where essentially higher prices aren’t generating any more supply,” Paul Sankey, an analyst at Deutsche Bank Securities in New York said in an interview with Bloomberg radio. “What we have to do is keep pricing the commodity higher until demand starts falling,” which “is around $150 a barrel.”

Crude oil for July delivery rose $4.19, or 3.3 percent, to settle at $133.17 a barrel at 2:44 p.m. on the New York Mercantile Exchange. Oil touched a record $134.15 today and has more than doubled from a year ago. Futures, up more than 17 percent this month, are heading for the biggest monthly gain since September 2004.

Bloomberg