Mumbai: Crude oil posted another record at above $135 a barrel, driven further up by concern about inadequate supplies in the US as its stockpiles shrunk last week.

US inventory of crude oil shrunk by 5.32 million barrels to 320.4 million barrels last week, marking the largest drop in four months, according to information from the Energy Department.

The stock of gasoline also dropped by 755,000 barrels, against analysts expectations of an increase. Analysts are now warning of oil prices at these levels as a serious macro-economic event, which will have major consequences once oil prices hit $150 or $200, in line with Goldman Sachs predictions. At that point, gasoline at the pump will cost around $6 a gallon, which will in turn impact demand and possibly drive a recession.

Crude oil for July delivery went up by $1.87, around 1.4 per cent, breaching the $135 mark to $135.04 a barrel during after-hours electronic trading on the New York Mercantile Exchange. By this morning, it was at $134.85. Oil for prompt delivery has also gone up by 8.5 per cent over the course of the past week. Futures contracts for 2016 went up by $20 to $142 a barrel. Brent crude for July settlement gained $1.80, around 1.4 per cent, settling at a record $134.50 a barrel on London's ICE Futures Europe exchange.

In a report on 16 May, Goldman Sachs had predicted the possibility of oil hitting around $150-$200 per barrel over the next six – 24 months. Goldman Sachs had first talked about a possible ''super spike''' in March 2005, saying then that crude might trade between $50 and $105 a barrel through 2009.

US oil company executives summoned by Congress said oil ought to be between $35 and $90 a barrel. Executives testifying before the Senate Judiciary Committee about the record energy prices included those from BP Plc, ConocoPhillips, Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell Plc.

According to John Hofmeister, president of Shell Oil Co., which is the Houston-based subsidiary of Royal Dutch Shell, oil should be ''somewhere between $35 and $65 a barrel'', while other executives pegged the top level price at a maximum of $90 per barrel. New York oil, if seen at unadjusted levels, has gone up over four-fold as compared to five years ago, when it was trading at just under $30 per barrel.

Airlines is one of the first sectors to have felt the impact of oil prices at current levels, as jet fuel costs form a significant chunk of their operating costs. The price of jet fuel has risen 88 per cent over the past year, and is now trading at a record level of $4.0592 a gallon.

The present spike is blamed on large institutional investors who are pouring money into oil, as it is presently giving better returns than alternative investments in stocks and bonds, which is leading to superheated prices. Other reasons to which the spike is attributed include a weaker US dollar, and enhanced demand from China and India, even Europe.

Americans have started buying lesser amounts of gasoline, with prices at the pump hitting new highs. The consequent change in driving habits is now making analysts think about a slowdown in consumer spending in the world's biggest economy.