Oil Jumps Past $137 a Barrel

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Crude oil prices jumped $3 Thursday to more than $137 a barrel on concerns that Libya may cut production and that European interest rates could push prices higher, Bloomberg reported.

The head of Libya’s national oil company said the country may cut output due to oversupply, while OPEC President Chakib Khelil said that Europe’s high interest rates could send prices higher, Bloomberg said.

Oil rose to $137.87 in early trading Thursday. It had droppped more than $2 Wednesday as record retail prices cut consumption, which caused petroleum inventories to rise for the first time in six weeks, Bloomberg said.

Futures fell $2.45 Wednesday to close at $134.55 a barrel on the New York Mercantile Exchange, Bloomberg reported.

Crude futures hit a record $139.89 in intraday trading on June 16, while the record closing price was $138.54, set on June 6.

Oil inventories rose 800,000 barrels last week, the Energy Department said in its weekly report Wednesday, in contrast to a 1.1 million-barrel drop forecast by analysts, Bloomberg said.

Fuel demand averaged 20.2 million barrels a day in the past four weeks, down 2.3% from a year earlier, DOE said.

Distillate inventories, which include diesel and heating oil, rose 2.8 million barrels, while gasoline inventories fell by 150,000 barrels.