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Crude Oil Closes Above $126

West Texas crude reached an intraday best at $127.65 -- its highest level ever.

Updated from 10:22 a.m. EDT

Crude oil futures hit a new record high Friday, supported by a bullish research report from Goldman Sachs regarding prices in the second half of the year.

West Texas crude reached an intraday best at $127.65 -- its highest level ever. However, underlying the headline news was the fact that oil traversed a broad trading range, at one point selling for as low as $124.04 a barrel. WTI crude ultimately settled at $126.29, gaining $2.17 in the session, but once again failing to stay above $126.50.

That price is proving to be a difficult level for the oil contract, according to Thomas Hartmann, energy analyst at Altavest Worldwide Trading. While crude has traded above $126.50, it has so far failed to close above the mark.

Still, crude's advance spurred upward moves for motor gasoline and heating oil futures, as well. Reformulated gasoline rose 5 cents to $3.22 a gallon, and heating oil gained 7 cents to $3.70 a gallon. Near-term natural gas fell though, losing 31 cents to $11.09 per million British thermal units.

The oil spike was fueled by a research report from Goldman, who lifted its projection for prices in the latter half of this year. Because of expected tight supplies, in part driven by demand from China in the aftermath of this week's earthquake, the firm is predicting oil will average $141 a barrel in the last six months of 2008, up from its old forecast of $107.

Goldman was moving markets for the second time in less than two weeks. Earlier this month, the firm said it was possible that oil could reach $150 to $200 a barrel in the next six months to two years.

The gain in crude also came as President Bush arrived in Saudi Arabia to discuss, among other things, whether the kingdom would be willing to increase oil production in an effort to help contain prices.

As for stocks,

Exxon Mobil

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climbed 1.5% to $92.67.


(CVX) - Get Chevron Corporation Report

added 1.9%, and shares of


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(COP) - Get ConocoPhillips Report

rose 3% to $91.98.

Oil-services stocks


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(SLB) - Get Schlumberger NV Report

climbed 2.4% and 1.8%, respectively. Among drillers,


(RIG) - Get Transocean Ltd. Report

moved 3.3% higher, and


(NE) - Get Noble Corporation plc Report

was up 1.9%.


United States Oil

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exchange-traded fund was up 2.1%.