The price for May delivery of West Texas Intermediate, the US benchmark crude oil, reached $112.15 a barrel on the New York Mercantile Exchange, up $3.65 on the closing market price the previous day. The market fell back to a closing price of $110.87, up 4.4 per cent since 4 April.
Prices for May delivery of Brent crude, the European benchmark, rose $3 to $109.34, before closing at $108.47.
The markets were taken by surprise by a fall in US crude stocks of 3.2 million barrels during the first week of April, contradicting expectations of a 2.2 million-barrel increase. The unexpected developments were reflected in trading following the release of inventory data on 9 April.
Crude imports to the US in the same period fell by 1.37 million barrels a day (b/d) to 8.91 million b/d. The fall was attributed to bad weather in the Houston Ship Channel.
Petroleum stocks also suffered an unexpectedly large drop, falling 3.4 million barrels in the first week of the month in a fourth consecutive weekly decrease.
According to data from Barclays Capital, for the past three weeks US oil product stocks have been falling at a rate of 610,000 barrels a day compared with the average for the same period in the previous five years.
According to the April report of the Energy Information Administration (EIA), oil markets are expected to remain tight going forward. While there is some slackening in demand growth, non-Opec supply is falling faster.
In its report, the EIA revised down its figures for 2008 supply growth from the US, Brazil and Russia by a total of 90,000 b/d. In the past two months, its predicted figure for non-Opec supply growth in 2008 has fallen by 340,000 b/d to 590,000 b/d.
Opec insists it is not considering increasing its output.
Despite increasing concerns from energy consumers about increasing oil prices, Opec President Chakib Khelil said on 8 April that there was no need for the organisation’s members to meet before the next scheduled meeting in September.