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Oil prices waded into uncharted territory above $80 US a barrel Wednesday after the U.S. government reported a big drop in crude oil inventories.
Crude oil futures for October delivery settled at $79.91 US... the price briefly touched $80.18 US. That easily tops the previous intraday record oil price of $78.77 US a barrel, set on July 31.
Inventories of gasoline fell by a more-than-expected 700,000 barrels and refineries were also less active.
Cr ude cruises to $80 a barrel - Commentary: Traders doubt OPEC's ability to boost output
What is remarkable about this latest spike in oil prices is not the usual knee-jerk reaction, but the fact that it comes on the heels of the Organization of Petroleum Exporting Countries' pledge to raise output to take some of the heat off prices.
Energy traders aren't buying it.
It's not that OPEC is reluctant to raise production. With prices this high, discipline within the group's unruly ranks is not a concern. They were already pumping nearly a million barrels a day above their official quota.
No, the skepticism has more to do with production capacity -- or lack thereof.
Oil consolidates but remains close to highs on supply fears, hurricane Humberto
An announcement from OPEC that it planned to pump an extra 500,000 barrels of oil per day from the start of November has done little to allay fears of supply shortage going forward.