Crude hits all-time high of $139.12/bbl after MS report

Crude surged more than USD 10 per barrel touching a record USD 139.12 per barrel during trade. Prices soared as the dollar weakened after the US unemployment rate grew the most in two decades and Morgan Stanley said prices may reach USD 150 per barrel within a month.

Oil also rose after an Israeli Minister said an attack on Iran may be necessary.

Sweet crude oil closed at USD 138.54 per barrel on the Nymex, a jump of USD 10.75 per barrel which was the biggest intra-day gain in in Nymex's history.

“We have run up to USD 135 per barrel prior to the Memorial Day holiday. It is very normal. You get the big spike before the driving season and then the week after you had the exuberance out of the market. Now the bears took this very normal exercise of exuberance and assumed that this was the pricking of the so called bubble. All we did was get down to the 50% retracement and have snatched right back out of it. So, this is the market that is built on a lot of momentum,” said Stephen Schork, The Schork Report.

“If you look at the oil inventories, they are down 19 million barrels over the last few weeks. You may hope that it may be an error but each one of the components like unemployment spiking, was down. So, it looks like real numbers and it does look recessionary to me,” said Arthur Cashin, UBS Financial Services.