- Oil prices shot up to a record high of $58.60 (U.S.)
a barrel Friday, extending a week-long rally driven by what one analyst
described as irrational fear that global demand is outpacing supply.
-
- Crude oil for July delivery jumped on the New York Mercantile
Exchange to the highest intraday level since futures began trading. At
the close of trading, it was up $1.82 at $58.40 a barrel. Prices have risen
7 per cent this week and are 49 per cent higher than they were a year ago.
-
- The crude rally began earlier this week after an unexpected
drop in U.S. gasoline inventories led to worries about tight supplies from
refinery glitches during the summer driving season.
-
- "This market is being driven by fear of what can
happen," said Citigroup analyst Kyle Cooper in Houston. "I am
trying to find a fundamental reason for today's rise, but there is none.
This is one of the most bearish markets we have seen in years, yet prices
are at record highs."
-
- On Wednesday, the U.S. Energy Department said crude supplies
fell 1.8 million barrels in the week ended June 10. At 329 million barrels,
however, inventories are well above the upper end of the average range
for this time of year.
-
- The report said gasoline inventories slipped by 900,000
barrels to 215.7 million barrels, or 5 per cent higher than a year ago.
Demand for motor gasoline in the U.S. has averaged nearly 9.5 million barrels
a day over the last four weeks, or 3 per cent above the same period last
year.
-
- "U.S. refineries are currently running at 96 to
97 per cent utilization," said Victor Shum, energy analyst at Texas-based
Purvin & Getz in Singapore. "Any refinery problems anywhere will
have an impact on product supply. This refinery capacity tightness is supporting
the upward trend in prices."
-
- According to Mr. Cooper, inventories in the U.S. are
at near-record highs when one looks at overall stocks. "Nobody mentions
the fact that U.S. oil production is above where it was a year ago."
-
- Heating oil climbed over 2 cents to $1.6493 a gallon
Friday, while unleaded gasoline rose 2 cents to $1.6165 a gallon.
-
- OPEC failed to soothe the market earlier this week when
it agreed to raise its daily output quota to 28 million barrels a day because
its members had already been unofficially exceeding that level. Including
Iraq, which is not bound by the cartel's quota system, the Organization
of Petroleum Exporting Countries is pumping close to 30 million barrels
a day, or about 35 percent of global demand.
-
- OPEC said it would consider another 500,000-barrel-per-day
increase if prices don't fall.
-
- "Despite the OPEC production news, crude hit a two-month
high Thursday - who would have ever thought the cartel would be producing
28 million barrels a day and we'd be taking about $56 a barrel oil,"
David Rosenberg, chief North American economist for Merrill Lynch, said
in a morning note on Friday.
-
- - With files from wires.
-
- © Copyright 2005 Bell Globemedia Publishing Inc.
All Rights Reserved.
-
- http://www.theglobeandmail.com/servlet/story/RTGAM.
20050617.woiltwo0617/BNStory/Business/
|
