Record-breaking oil prices spiked close to $106 today after the market was rattled by news of a small explosion in New York and following a surprise fall in US crude stockpiles.
US crude hit $105.97 a barrel, extending gains above $105 after topping the previous record of $104.95 set yesterday. Brent North Sea crude for April jumped to $102.95, beating its previous all-time peak of $102.29 set on Monday.
Police cordoned off a section of New York's Times Square early today after a small explosion struck near a military recruiting station, officials said.
A New York Police Department spokesman said only that there had been a minor explosion, that there were no injuries and that police were investigating the cause of the blast.
Before news of the explosion, the market was already well supported by figures showing lower US crude reserves and the plunging dollar. The US Department of Energy said yesterday that US crude inventories tumbled 3.1 million barrels last week, marking the first weekly drop for one and a half months.
The news shook the market which had been expecting a gain of 2.4 million barrels and sent New York crude spiking close to $105 yesterday.
Oil was also pressured after the OPEC crude exporters' cartel decided yesterday to maintain current output levels despite calls from the West for a hike to help dampen runaway prices that threaten economic growth.
In announcing it would maintain daily production at the current level of 29.67 million barrels, OPEC said the market was 'well-supplied' - a sentiment not fully shared by traders.
