Oil Tops $77

Oil Prices Top $77 a Barrel.

NEW YORK (AP) -- Oil prices topped $77 a barrel Thursday amid speculative buying and worries that inventories of crude oil at a key Oklahoma terminal fell last week.

Light, sweet crude for September delivery climbed as high as $77.24 a barrel in electronic trading on the New York Mercantile Exchange before dropping back to $76.91, up $1.03.

September Brent crude advanced 54 cents to $76.86 a barrel Thursday on the ICE Futures exchange in London after hitting $77.16 earlier in the session.

U.S. oil surpassed London Brent prices Thursday for the first time in five months. A supply glut at Cushing, Oklahoma -- the delivery point for crude traded on the Nymex -- had held U.S. oil unusually lower than the brent benchmark since February.

The U.S. Energy Department's weekly supply report on Wednesday, however, showed a 1.4 million barrel decline in oil inventories in and around the Cushing, Oklahoma, storage point, analysts said.

Prices jumped Wednesday after the weekly supply report showed overall increases in gasoline inventories and refinery utilization, and declines in inventories of crude oil, roughly in line with analyst expectations.

Some, however, hinted Thursday's price movements were purely speculative as fundamentals were mostly unchanged.

"It seems that the bulls are back on the market, " said Sucden analyst Michael Davies in London. "Investors are prepared to put more money into oil once again."

Thursday's increases renewed speculation that crude futures would resume their challenge of record highs.

"It is still very much a reality that we could see $80 a barrel," said Rob Laughlin of brokerage MF Global. "We haven't seen a storm yet and refineries have shown there is demand for crude out there."