Oil futures extended their seemingly relentless advance Wednesday, rising to a new record near $124 a barrel as investors captivated by the market's upward momentum looked past the government's report of an increase in crude and gasoline supplies. At the pump, gas prices rose for the first time since last week.
Light, sweet crude for June delivery hit a new trading record of $123.89 in after-hours activity on the New York Mercantile Exchange after settling up $1.69 at a record close of $123.53 a barrel.
Analysts attributed oil's rise to continued buying from the surge that pushed prices past $120 for the first time earlier this week. The fact that prices didn't decline sharply after the inventory report was released signaled to some investors that the market was ripe for another rally.
"It shows you that this market ... at times just ignores bearish news," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "It's just momentum."
Earlier, oil prices waffled as traders were torn between relief that crude and gasoline supplies are rising and worries about rising demand and falling distillate stockpiles.
The Energy Department's Energy Information Administration said in a weekly report that distillate fuels, which include diesel and heating oil, fell unexpectedly while gasoline demand rose slightly last week.
Traders chose to focus on those numbers and shrug off crude inventories, which rose much more than analysts predicted, and gasoline supplies, which increased when analysts forecast a decline.