March 6, 2008 (AFP) – Oil edged close to 105 dollars a barrel in Asian trade early Thursday as investors fretted over an unexpected drop in US energy stockpiles, dealers said. It also said it was concerned that the current price “does not reflect market fundamentals (of real supply and demand).” OPEC’s decision to maintain output levels and the dollar’s continued weakness were also driving crude higher, they said.
New York’s main contract, light sweet crude for April delivery, traded at a new high of 104.95 US dollars. It closed Wednesday at 104.52 dollars.
The surprise fall in US energy stocks and OPEC’s decision to stick to its current output levels are expected to keep oil prices above the key 100-dollar mark, dealers said.
“The truth of the matter is there is not a lot of supply in the supply chain,” said Justin Wilks, director of trading and operations at Global Commodities fund group in Australia.
Regarding prices over 100 dollars, Wilks said: “I would suggest that we would have to get used to it.”
Prices shot higher in US trading hours Wednesday after the Department of Energy’s (DoE) energy stockpiles report showed crude inventories tumbled by 3