Oil prices shattered record highs and soared above 133 U.S. dollars a barrel Wednesday after a report showed an unexpected drop in the U.S. crude stockpiles .

Unexpected inventory drop - 22 / 05 / 2008 09:39

Oil prices shattered record highs and soared above 133 U.S. dollars a barrel Wednesday after a report showed an unexpected drop in the U.S. crude stockpiles .

Light, sweet crude for July delivery rose 4.19 dollars to settled at 133.17 dollars a barrel on the New York Mercantile Exchange (NYMEX), trading up 4.19 dollars, the largest one-day price advance since March 26.

But prices continued to rise as high as 133.82 dollars a barrel in the after-hour electronic trading.

In London, Brent crude for July delivery rose 4.86 dollars to close at 132.70 a barrel.

Unexpected inventory drop

The U.S. Energy Department's Energy Information Administration (EIA) released its weekly report Wednesday, saying that crude inventories fell 5.32 million barrels to 320.4 million barrels last week, the biggest drop in four months.

Analysts had expected crude oil stocks to be up 900,000 barrels, according to a survey from Platts, an energy research firm. Prior to the report which was out at 10:30 a.m. local time (1430 GMT), crude futures on NYMEX was down 29 cents to 128.69 dollars a barrel.

Bullish oil remains

The June contract expired Tuesday with crude settling at the then record high of 129.07 dollars a barrel, up 2.02 dollars from Monday's settling price of 127.05 dollars a barrel.

Crude oil prices have more than doubled in the past year.

"The path of least resistance for prices is higher and it will keep going up until it does not!" U.S. billionaire hedge-fund manager Boone Pickens told CNBC on Tuesday that oil will reach 150 dollars a barrel this year because the global supply can not meet the demand.

Goldman Sachs raised its average oil price forecast for the second half of this year to141 dollars from 107 dollars a barrel on Friday.

Goldman, the most active investment bank in the energy market, also predicted earlier that supply shortage will send oil prices to 200 dollars a barrel within two years.