Oil Jumps Again, Cracks $96 a Barrel

Supply shortage spooks market into 'unknown territory'
By Jason Farago,  Newser Staff
Posted Nov 1, 2007 5:32 AM CDT
A trader at Nymex. Oil surpassed $96 a barrel yesterday.   (Getty Images (by Event))
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(Newser) – The price of oil smashed yet another record yesterday, rising more than $96 a barrel after a surprise announcement of diminished US crude stockpiles. The unexpected shortfall in American petroleum before winter worried investors and sent prices soaring. The Fed's rate cut also helped push prices higher, since a drop in rates tends to lower the value of the dollar.

The announcement by a closely watched oil terminal in Oklahoma of smaller-than-expected yields led the Energy Department to issue a warning about "tightening marketing conditions ahead of the northern winter." Petroleum analysts admit they're in "unknown territory," as nobody wants to sell if oil prices continue to skyrocket. Adjusted for inflation, crude prices have now surpassed the highs set in 1980.