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Oil prices surged nearly $5 to a record near $134 a barrel on Wednesday (May 21) after a U.S. government report showed a surprise drop in crude stockpiles, reinvigorating fears of a supply crunch. The gains bring oil up more than 33 percent so far this year in a rally that has raised alarm bells in consumer countries like the United States, already hard-hit by a housing slump and credit crisis. Weakness in the U.S. dollar encouraged Wednesday's buying spree by bolstering the purchasing power of buyers holding other currencies, dealers said. U.S. crude settled up $4.19 at $133.17 a barrel before extending its gains to $133.93 by 2025 GMT. London Brent rose $4.86 to end at $132.70. The U.S. Energy Information Administration reported that crude stockpiles in the world's biggest energy consumer fell 5.4 million barrels last week, countering expectations for a build. The fall in weekly inventories intensified concerns that supply problems will persist for years as production falls short of growth in demand. Oil for delivery in December 2016 rose above $142 a barrel on Wednesday -- making it the loftiest contract on the futures curve. And bearing the brunt of the escalating crude oil prices is the airline industry, as Jim Corridore, an equity analyst at Standard & Poors explained. "Since fuel cost is one third of the airline costs, so any rise in oil really hurts them and it really has spiked a lot. Its up about 80% so far this year alone and its up about 250 to 300% in the past three years. And revenues have not risen at the same pace as fuel costs have risen and so what's happened is the industry which was expected to make money this year is now going to have a large loss and the airlines are scrambling," said Corridore. The shares of the world's largest airline, American Airlines, fell 24 percent on Wednesday as it said it will cut thousands of jobs, retire old aircraft and charge passengers to check bags in a move to counter record fuel prices and a weak U.S. economy. So for the first time in aviation history, air travelers will have to pay to check in all of their bags. American Airlines will start charging $15 for the first piece of checked luggage this summer on all domestic flights. The new fee is just one way the world's biggest airline is grappling with record jet fuel costs and a sluggish economy, CEO Gerard Arpey told the media in a conference call. American and most other airlines were already charging passengers to check more than one bag. Other measures that American Airlines' parent company, AMR Corp. will take includes slashing the travel schedule by a whopping 11 to 12 percent, laying-off staff and retiring older less-fuel efficient aircraft. Fewer planes can only mean one thing for the flying public, as Corridore explained. He said over the long run, customers are going to see fewer choices and smaller cities are going to be undeserved or not served at all. And with oil prices expected to climb even more - travelers could face even higher prices, more fees, and fewer planes during the peak travel season.