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LONDON -- Trading at a whopping $115 a barrel, a new oil record was set today which coincided with a drop in U.S. gasoline inventories that together raised growing concerns of tightening supply and a weakening dollar.
According to Reuters, a U.S. government report released on Wednesday underscored a drop in crude inventories and a larger-than-expected decline in stocks of gasoline, a pattern consistent with the approaching peak summer months.
"The helpful thing for the market is the further erosion in product stocks," Christopher Bellew, senior vice president at Bache Commodities told Reuters. "Technically, the market still looks bullish."
Reuters reports that oil has hit escalating peaks the last three days finally reaching the record setting U.S. crude of $115.54 a barrel. According to U.S. Energy Information Administration, gasoline stocks in the United States fell by 5.5 million barrels in the latest week, more than the1.8 million-barrel decline analysts expected.
"Summer driving season is approaching. And even in a recessionary economy, seasonal gasoline demand will pick up, which adds to stress on the global oil supply chain," UBS's Jan Stuarttold told Reaturs. "But before we get there, the stress already put onto the supply chain globally by middle distillate demand and supply dynamics is not still abating," Stuarttold added in a released statement.