By Wang Lan (China Daily)
Updated: 2007-11-01 17:49

Fuel oil futures contracts on Shanghai Futures Exchange today soared 3.14 percent, the largest single-day jump in a month, following the price surge of crude oil to record prices globally.

The most actively traded fuel oil futures contracts for delivery in January 2008 jumped 3.14 percent to close at 3,880 yuan (US$520) per ton. The price of the contracts climbed as high as 3,938 yuan at one point during the day trading, slightly below the historic high of 4,166 yuan reached in May last year.

Analysts said fuel oil futures prices in the domestic market were largely pushed up by surging crude prices worldwide. Crude prices rose on news of a drastic decline in international inventory last week and renewed worries about further weakening of the US dollar following another interest rate cut of 25 basis points earlier today.

According to figures from the US Energy Information Administration, crude oil inventory dropped 3.9 million barrels last week, although the expectation was an increase of around 100,000 barrels. Much of the decline was attributed to a big drop in crude supplies at a major terminal in the Mideast, Reuters reported.

Today’s move by the Federal Reserve is seen as inflating the oil prices because it is expected to further depress the US dollar at a time when it is already trading at a record low against the euro, analysts said.

On the New York Mercantile Exchange, the most actively traded crude oil futures contracts for delivery in December rose 0.99 percent yesterday to US$95.47 per barrel in electronic trading. The contracts price hit a new high of US$96.24 before receding to around US$95.

The latest increase in crude prices has prompted China’s National Development and Reform Commission to act. Yesterday it announced it is raising the average retail price of gasoline and diesel by 0.4 yuan and 0.46 yuan per liter, respectively, beginning today.