Oil and its exchange traded funds (ETFs) just won’t quit. A surprise drop in the supply caused prices to hit yet another record, hitting $104.31 a barrel.

John Wilen for the Associated Press says that analysts had expected the opposite, that supplies would rise for the eighth straight time. Instead, they fell by 3.1 million barrels. Adding insult to injury, the Organization of Petroleum Exporting Countries (OPEC) said it wasn’t going to increase production.

United States Oil (USO), Oil Service HOLDRs (OIH), iShares Dow Jones US Oil & Gas Exploration (IEO) and United States Natural Gas (UNG) were all up in midday trading.

In the service sector, the numbers were better than expected and calmed some fears about the economy, says Tim Paradis for the Associated Press. The Institute for Supply Management said that while activity in the sector declined in February, the drop-off wasn’t as steep as Wall Street had feared. They’ll take their good news where they can get it, because January’s reading had been a steep drop.

Several of the service sector-focused ETFs were lower in midday trading, including the Retail HOLDRs (RTH), Consumer Discretionary SPDR (XLY), Financial Select Sector SPDR (XLF) and iShares Dow Jones US Financial Services (IYG).

For full disclosure, some of Tom Lydon’s clients own shares of IEO.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.