Oil Prices Surge Past $63 a Barrel
Oil prices shot up by almost $2 a barrel Thursday in what some analysts described as a delayed reaction to U.S. government data released the previous day that showed shrinking domestic supplies.
The buying was propelled by reports from Dow Jones Newswires and others that Rome-based Eni SPA's Nigerian unit would not fully repair a 75,000-barrel-per-day pipeline that was sabotaged until the end of the month.
"This market is very sensitive to geopolitical news," said Lee Fader, a broker at ABN Amro in New York. That said, Fader believes oil will continue to trade in a range of about $60-$65 per barrel, unless there is some major change in either supply or demand.
Light sweet crude for May delivery gained $1.78 to $63.55 a barrel in afternoon trading on the New York Mercantile Exchange. On Wednesday, crude futures fell 57 cents, dragged down by a steep drop in gasoline futures.
Nymex April gasoline climbed 3.85 cents to $1.775 a gallon, retracing a portion of the more than 10-cent-per-gallon drop a day earlier. Heating oil was steady at $1.7442 a gallon, while natural gas gained 24.7 cents to $7.20 per 1,000 cubic feet.
May Brent crude futures on ICE Futures in London rose 58 cents to $62.08 a barrel.
In its latest weekly report, the U.S. Energy Department said Wednesday that domestic inventories of crude oil declined by 1.3 million barrels last week to 338.6 million barrels, or 9 percent above year-ago levels.
But Alaron Trading Corp. analyst Phil Flynn said the historically high levels of inventory are not providing much comfort to the market.
"We've got the highest level of inventory since 1999. That's great except that we have a different world than 1999," Flynn said, citing stronger demand, little excess production capacity and much more geopolitical uncertainty.
Prices had been supported in recent weeks by persistent concerns over supply disruptions in Nigeria, where rebels have struck an oil pipeline operated by Eni SPA's Agip Oil Co. unit, as well as the potential threat of United Nations Security Council action against Iran over its nuclear ambitions.
The five permanent members of the U.N. Security Council have been debating since last week what action the council should take after the U.N. nuclear watchdog referred Iran, OPEC's No. 2 oil producer, to the body.
The United States accuses Iran of seeking to develop nuclear weapons, a charge denied by Tehran, which says its program aims only to generate electricity.
Forbes
The buying was propelled by reports from Dow Jones Newswires and others that Rome-based Eni SPA's Nigerian unit would not fully repair a 75,000-barrel-per-day pipeline that was sabotaged until the end of the month.
"This market is very sensitive to geopolitical news," said Lee Fader, a broker at ABN Amro in New York. That said, Fader believes oil will continue to trade in a range of about $60-$65 per barrel, unless there is some major change in either supply or demand.
Light sweet crude for May delivery gained $1.78 to $63.55 a barrel in afternoon trading on the New York Mercantile Exchange. On Wednesday, crude futures fell 57 cents, dragged down by a steep drop in gasoline futures.
Nymex April gasoline climbed 3.85 cents to $1.775 a gallon, retracing a portion of the more than 10-cent-per-gallon drop a day earlier. Heating oil was steady at $1.7442 a gallon, while natural gas gained 24.7 cents to $7.20 per 1,000 cubic feet.
May Brent crude futures on ICE Futures in London rose 58 cents to $62.08 a barrel.
In its latest weekly report, the U.S. Energy Department said Wednesday that domestic inventories of crude oil declined by 1.3 million barrels last week to 338.6 million barrels, or 9 percent above year-ago levels.
But Alaron Trading Corp. analyst Phil Flynn said the historically high levels of inventory are not providing much comfort to the market.
"We've got the highest level of inventory since 1999. That's great except that we have a different world than 1999," Flynn said, citing stronger demand, little excess production capacity and much more geopolitical uncertainty.
Prices had been supported in recent weeks by persistent concerns over supply disruptions in Nigeria, where rebels have struck an oil pipeline operated by Eni SPA's Agip Oil Co. unit, as well as the potential threat of United Nations Security Council action against Iran over its nuclear ambitions.
The five permanent members of the U.N. Security Council have been debating since last week what action the council should take after the U.N. nuclear watchdog referred Iran, OPEC's No. 2 oil producer, to the body.
The United States accuses Iran of seeking to develop nuclear weapons, a charge denied by Tehran, which says its program aims only to generate electricity.
Forbes
posted by Ottawa Gas Prices | 12:43 PM
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