7 May 2009

Oil price reaches highest level since November

9:43 am on 7 May 2009

Oil prices rose to five month highs above $56 a barrel on Wednesday after a surprise drop in gasoline inventories in the United States.

US light crude for June delivery settled at $US56.34 per barrel, up $US2.50, - the highest settlement since 14 November, 2008.

London Brent crude settled at $US56.15 per barrel, up $US2.03.

US gasoline stocks declined unexpectedly last week, falling 200,000 barrels to 212.4 million barrels.

However, the US Energy Information Administration said crude inventories rose again last week, up 600,000 barrels to 375.3 million barrels - the highest for 19 years.

A slump in demand and growing stockpiles has sent crude sinking from a record price of $US147.27 per barrel on 11 July last year.

Members of the Organization of Petroleum Exporting Countries last year agreed to a series of output cuts totalling 4.2 million barrels per day to absorb excess supply and support prices.

Venezuela said on Wednesday that the cartel is seeking a minimum oil price of $US70 per barrel.