Oil Prices Hurtle Past US$67 a Barrel Amid Persistent Supply Disruptions
The price of oil topped $67 US a barrel Thursday amid persistent supply disruptions in the Gulf of Mexico and Nigeria, a UN standoff with Iran over its nuclear program and growing demand in the U.S. despite rising energy costs.
The market was also rattled by an announcement late Wednesday from Venezuela's oil minister that Exxon Mobil Corp., the world's largest publicly traded oil company, was no longer welcome in his country - the latest sign of tighter state-control of energy around the globe.
"All of these things are adding up," said Antoine Halff, director of global energy at Fimat USA in New York.
Light sweet crude for May delivery rose 70 cents to settle at $67.15 a barrel - a two-month high on the New York Mercantile Exchange. Crude futures are 24 per cent higher than a year ago.
Brent crude for May gained 50 cents to $66.05 a barrel on London's ICE Futures exchange.
Gasoline prices rose 4.15 cents to finish at $1.9957 a gallon (3.8 litres), while heating oil futures gained 3.23 cents to end at $1.8843 gallon. Natural gas futures climbed 3.1 cents to settle at $7.487 per 1,000 cubic feet.
Tensions between Exxon Mobil and Venezuela boiled over because the Texas-based company resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to "re-nationalize" the oil industry. Rather than submit to new terms that will turn 32 privately run oil fields over to state control, the company sold its stake in a 150,000 barrel-a-day field to its partner, Spanish-Argentine major Repsol YPF.
"Exxon Mobil ... preferred to sell to Repsol, its partner in the agreement, rather than adjust," Oil Minister Rafael Ramirez said in an interview with the state-run TV broadcaster. "We said we don't want them to be here then," Ramirez added.
On Thursday, top officials of the five permanent Security Council countries plus Germany urged Tehran to freeze uranium enrichment, but a senior Iranian envoy defiantly rejected the call, saying his country's activities were "not reversible."
Iran, the No. 2 oil producer in OPEC, has been referred to the UN Security Council over fears it may want to misuse its nuclear program to make weapons.
In the Gulf of Mexico, oil output is still down by 343,000 barrels per day because of damage that occurred during last summer's hurricanes Katrina and Rita. That is roughly 23 per cent below pre-storm output levels.
Nigerian oil output also remains a concern. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut in nearly half of its Nigerian production and says it won't resume operations until the country is safe enough for its workers. Some 550,000 barrels per day of Nigerian production has been shut in, analysts said.
Concern about gasoline was also affecting the market.
In its weekly petroleum report, the U.S. Energy Department said Wednesday that gasoline inventories fell by 5.4 million barrels last week to 216.2 million barrels, about even with year ago levels. The decline came as refiners conducted maintenance on their facilities ahead of summer in the Northern Hemisphere, when fuel demand peaks.
OttawaCitizen
The market was also rattled by an announcement late Wednesday from Venezuela's oil minister that Exxon Mobil Corp., the world's largest publicly traded oil company, was no longer welcome in his country - the latest sign of tighter state-control of energy around the globe.
"All of these things are adding up," said Antoine Halff, director of global energy at Fimat USA in New York.
Light sweet crude for May delivery rose 70 cents to settle at $67.15 a barrel - a two-month high on the New York Mercantile Exchange. Crude futures are 24 per cent higher than a year ago.
Brent crude for May gained 50 cents to $66.05 a barrel on London's ICE Futures exchange.
Gasoline prices rose 4.15 cents to finish at $1.9957 a gallon (3.8 litres), while heating oil futures gained 3.23 cents to end at $1.8843 gallon. Natural gas futures climbed 3.1 cents to settle at $7.487 per 1,000 cubic feet.
Tensions between Exxon Mobil and Venezuela boiled over because the Texas-based company resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to "re-nationalize" the oil industry. Rather than submit to new terms that will turn 32 privately run oil fields over to state control, the company sold its stake in a 150,000 barrel-a-day field to its partner, Spanish-Argentine major Repsol YPF.
"Exxon Mobil ... preferred to sell to Repsol, its partner in the agreement, rather than adjust," Oil Minister Rafael Ramirez said in an interview with the state-run TV broadcaster. "We said we don't want them to be here then," Ramirez added.
On Thursday, top officials of the five permanent Security Council countries plus Germany urged Tehran to freeze uranium enrichment, but a senior Iranian envoy defiantly rejected the call, saying his country's activities were "not reversible."
Iran, the No. 2 oil producer in OPEC, has been referred to the UN Security Council over fears it may want to misuse its nuclear program to make weapons.
In the Gulf of Mexico, oil output is still down by 343,000 barrels per day because of damage that occurred during last summer's hurricanes Katrina and Rita. That is roughly 23 per cent below pre-storm output levels.
Nigerian oil output also remains a concern. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut in nearly half of its Nigerian production and says it won't resume operations until the country is safe enough for its workers. Some 550,000 barrels per day of Nigerian production has been shut in, analysts said.
Concern about gasoline was also affecting the market.
In its weekly petroleum report, the U.S. Energy Department said Wednesday that gasoline inventories fell by 5.4 million barrels last week to 216.2 million barrels, about even with year ago levels. The decline came as refiners conducted maintenance on their facilities ahead of summer in the Northern Hemisphere, when fuel demand peaks.
OttawaCitizen
posted by Ottawa Gas Prices | 9:54 PM
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