Updated from 2:20 p.m. EST
Crude oil prices soared to a new record high Wednesday following the release of bullish inventory data, even though OPEC said it had agreed to increase its official production ceiling in an effort to cool the latest market rally.
The April futures contract closed up $1.41 to $56.46 in Nymex floor trading, having traded as high as $56.50, both topped the intraday record high of $55.67 and the closing record high set last October.
Traders focused on weekly energy inventory data from the government, which showed an increase in crude stocks but a decline in distillates -- which include heating oil -- and gasoline supplies. Crude stocks fell by 2.6 million barrels, but distillates fell by 1.9 million barrels in the most recent week.
The OPEC output issue has assumed greater importance because of an unusually long cold snap in parts of the northeastern U.S. that has inflated demand for heating oil at a time of the season during which supplies are usually on the decline.
Earlier today, members of the oil cartel meeting in Iran agreed to increase daily output by 500,000 barrels a day, effective April 1. That raises the ceiling to 27.5 million barrels a day, a figure that fails to reflect systemic cheating on individual quotas.
Momentum for a production increase gained strength in the past week, led by Kuwait --- which holds the cartel's rotating presidency -- and Saudi Arabia, the group's largest and most influential producer.
With prices flirting with October's record closing high of $55.17 a barrel in recent days, OPEC said it was prepared to increase output again, if necessary.
The cartel formerly cut production by a million barrels a day, effective Jan. 1, having boosted production three times by a total of 2.5 million barrels a day in the second half of last year as prices marched irrevocably higher. Saudi Arabia was instrumental in pushing through those output increases.
A year ago at this time, the benchmark U.S. crude was trading around $37 a barrel.