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Oil prices pass $132 after government reports supply drop

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By The Associated Press | Wednesday, May 21, 2008 12:10 PM CDT | () comments

Unidentified good Samaritans help push a car Tuesday while waiting in the line to receive a free tank of gasoline during a beverage company's promotional event in Philadelphia. (AP Photo)

UPDATED: NEW YORK — Oil prices bolted to a new record above $132 a barrel Wednesday after the government reported that supplies of crude oil and gasoline fell unexpectedly last week. And crude's rise in the futures market again pressured consumers by pulling prices at the pump higher — a gallon of regular gas rose overnight to a new record above $3.80 a gallon.

   In its weekly inventory report, the Energy Department's Energy Information Administration said crude oil inventories fell by more than 5 million barrels. Analysts had expected a modest increase. Gasoline inventories also fell and took the market by surprise.

   Light, sweet crude for July delivery was up more about $3, rising as high as $132.08 a barrel in late morning trading on the New York Mercantile Exchange.

   At the pump, the average national price of a gallon of regular gas rose 0.7 cent overnight to a record $3.807 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Prices are 60 cents higher than a year ago, and many forecasters believe they'll hit $4 on a national basis at some point over the next month. Prices are already that high in many parts of the country, and the number of stations charging $4 or more rises each day.

   Diesel fuel rose 1.9 cents to its own record price of $4.558 a gallon Wednesday. Rising prices of diesel, used to transport most consumer and industrial goods, are sending prices of food and many other goods higher.