Oil reached another record high on Thursday in U.S. trading and closed above $90 for the first time ever. Light sweet crude for December delivery closed at $90.46, up $3.36. Crude got as high as $90.60 in afternoon trading. The previous high of $90.07 was reached on Oct. 19 in the November contract. Oil has added more than $5 a barrel over the last two days on weak supplies and continued tensions in the Middle East. Crude increased by $1.83 on Wednesday, easily erasing losses from earlier in the week. Prices spiked up sharply after the Energy Information Administration report showed an unexpected drop in crude oil and gasoline inventories. Data revealed that crude oil inventories fell by 5.3 million barrels in the week ended October 19 following an increase of 1.8 million barrels in the previous week. The decrease came as a surprise to analysts, who had expected inventories to increase by about 700,000 barrels. The conflict between Turkey and Kurdish militants on Thursday, posing a possible threat to oil supplies in Iraq. An attack earlier this month left 42 Turks dead. Meanwhile, the U.S. government announced new sanctions against Iran on Thursday. In economic news on Thursday, the Department of Commerce released its report on durable goods orders in the month of September on Thursday, showing that orders fell unexpectedly due largely to a steep drop in orders for defense aircraft and parts. The report showed that durable goods orders fell 1.7 percent in September following a revised 5.3 percent decrease in August. The decrease came as a surprise to economists, who had expected orders to rise 1.5 percent compared to the 4.9 percent decrease originally reported for the previous month. Later in the morning, the Department of Commerce released its report on new home sales in the month of September, showing that new home sales increased compared to a downwardly revised reading for the previous month. The report showed that new home sales rose 4.8 percent to an annual rate of 770,000 units in September from a revised August rate of 735,000 units. Despite the increase, however, new home sales were still down 23.3 percent compared to the same month last year.
October 25, 2007 3:46 PM