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Oil nears $115 a barrel

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Date: Wednesday 16 Apr 2008

LONDON (ShareCast) - Crude oil approached $115 a barrel today after the US government reported an unexpected fall in inventories.

The Energy Information Administration reported a 2.3m barrel decline in supplies, leaving the US with 313.7m barrels of oil, which is lower than average for this time of the year. Analysts had been expecting the weekly report to show a 1.7m barrel rise after a drop of 3.2m the previous week.

New York crude oil futures hit a record $114.68 a barrel after the release of the report.

Prices had already been edging up ahead of the data, with the dollar continuing to weaken against the euro and other currencies.

The EIA report also said that refineries operated at 81.4%, their lowest capacity since several were shut down along the Gulf of Mexico coast due to hurricane Katrina in October in 2005.

Analysts said this was due to sluggish demand reducing the incentive for refineries to convert crude into petrol and other products.