NEW YORK (Reuters) - Oil hit a record high near $115 a barrel on Wednesday as the dollar crashed to new lows and U.S. crude and inventories fell sharply as the world’s top consumer gears up for the summer driving season.
U.S. crude traded up 33 cents to $111.12 a barrel at 1:56 p.m EDT (1756 GMT), off a record $114.95 struck right after the U.S. Energy Information Administration released its inventory data for the week to April 11.
Brent crude rose 44 cents to $112.02 a barrel, easing off an all-time peak of $112.73 hit earlier.
U.S. crude stocks fell 2.3 million barrels last week, countering analyst forecasts for a build, while gasoline stocks showed a more-than 5 million barrel draw, the EIA said.
The draws came as refiners cut runs to 81.4 percent of capacity — the lowest level in since October 2005 after hurricanes flooded Gulf Coast plants — as high crude prices cut into profit margins.
“The refinery utilization number is exactly where refiners want it to be — poor gasoline economics has prompted refineries to go slow on production. They are also looking at product demand numbers, which are not strong,” said Tim Evans, energy analyst at Citigroup Futures Research.
U.S. gasoline demand has been hit by surging fuel coasts, and analysts are forecasting record pump prices for U.S. motorists taking to the roads for vacation this summer.
Heating oil stocks rose by 100,000 barrels last week, according to the EIA, as warmer weather hit much of the United States, prompting a bout of profit-taking in early afternoon activity.
The slumping U.S. dollar, which plumbed new lows against the euro on Wednesday, has also supported oil’s record rally by boosting non-U.S. spending power and attracting investors seeking an inflation hedge.
“The dominant factor continues to be the U.S. dollar and I expect this to continue for a while,” said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting.
“Whenever you get any kind of good economic news out of the (United States) at the moment, the dollar will rise and oil falls, and the other way round, you get a new oil record.”
Support has also come from London’s ICE gas oil futures, the benchmark for heating oil and diesel in Europe, which have traded $1,000 a tonne for most of the time since early April.
Additional reporting by Gene Ramos and Robert Gibbons in New York; Annika Breidthardt in Singapore; Bate Felix and Alex Lawler in London; Editing by Marguerita Choy