Crude oil pushes to 21/2-year high

by The Associated Press

Crude oil futures surged Monday, Sept. 12, to their highest level since early 1997, topping $24 a barrel on the New York Mercantile Exchange amid signs once-flush U.S. inventories are still in free fall.

Crude prices have doubled this year after plummeting to a 12-year low in December.

After increasing throughout the previous week, crude saw a sixth straight price rise Sept. 12 as investors anticipated that the upcoming American Petroleum Institute report would show yet another decline in U.S. inventories.

Alaska North Slope crude closed at $23.30 Sept. 12, up 71 cents from the previous Friday and the highest price since Jan. 30, 1997.

Adding to that expectation were figures showing an 8 percent decline in monthly activity at the Louisiana offshore oil port — confirmation that less oil is flowing into the United States.

The last API report put U.S. stocks at 311 million barrels. Inventories have averaged 3-million-barrel drops in recent weeks. If that pace holds steady, it would mean the total could drop below 300 million level by early October.

“When that figure starts with a 2, we can consider the market tight. ... We had a glut a year ago. Well, the glut is gone,” said Tim Evans, energy analyst for the Pegasus Econometric Group in New York.

Prospects for changes any time soon were further diminished by comments of the oil minister of the United Arab Emirates, who said Sept. 11 that the Organization of Petroleum Exporting Countries won’t review its oil production cuts before they run out next March.

OPEC’s steadfast adherence to the cutbacks policy has helped drain oil supplies worldwide and push up prices.