Crude oil hit nearly $80 a barrel today—its highest price ever—thanks to dwindling supply. US inventories fell by 7M barrels last week, much more than the 2.7M analysts predicted. OPEC announced a production increase of only 500K barrels, which Bloomberg reports will not meet seasonal demand increases. Storms in the Gulf of Mexico also contributed to rising prices.
"Seven million barrels is an awful lot of oil to lose in one week,'' said one analyst, adding that the US had pressured the oil cartel to boost production. "There's a feeling that OPEC waited too long to make this move.'' Demand is expected to continue rising worldwide, though the impact of the ongoing credit crisis is uncertain.