Next stop, infinity
Investors rushed to buy oil futures contracts as far forward as December 2016, pushing prices as high as $139.30 a barrel, up $9 on the day. Veteran traders said they had never seen such a jump. The spot price hit a new record of $129.60 a barrel…
Goldman Sachs, one of the Wall Street’s most influential voices in the energy market, last week advised its customers to buy oil contracts for 2012. T. Boone Pickens, the influential oil investor who believes the world’s oil output is about to peak, warned oil prices would hit $150 a barrel by the end of the year. “Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87m,” Mr Pickens said in an interview with CNBC. “It’s just that simple.”
AP:
Oil prices bolted to a new record above $132 a barrel Wednesday…the Energy Department’s Energy Information Administration said crude oil inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase. Gasoline inventories also fell and took the market by surprise, while inventories of distillates, which include heating oil and diesel fuel, rose less than analysts surveyed by energy research firm Platts had expected.
Light, sweet crude for July delivery rose as high as $132.08 a barrel in late morning trading on the New York Mercantile Exchange before retreating slightly to trade up $2.75 at $131.73.
Investors seized on the inventory report to push prices higher Wednesday, but traders interested in pushing prices higher are increasingly picking and choosing which news they wish to pay attention to, analysts say.
“Just the slightest piece of bullish news will cause prices to surge,” said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos. But prices also rise when bearish news is reported, a sign that the market wants to move higher regardless, she added.
Next stop, infinity, right? Just because no one saw this coming doesn’t make it anything out of the ordinary, does it?