RE: oil prices up again $67By EDITH BALAZS
Friday, August 12, 2005
ASSOCIATED PRESS
Crude-oil prices topped $67 (U.S.) a barrel Friday, setting a new record, as reports of U.S. refinery outages spark fears that gasoline supplies in the world's biggest consuming nation would struggle to meet rising demand.
The price of oil is on track for a one-week gain of more than 7 per cent.
The threat of hurricanes in the Gulf of Mexico and concerns over Iran's decision to resume uranium conversion activities also weighed on markets, pushing prices upward, analysts said.
Tropical Storm Irene was expected to intensify Friday and possibly reach hurricane strength as it approached the U.S. East Coast, forecasters said.
Irene's potential threat to land was still uncertain, as its path had shifted east, according to forecasters at the National Hurricane Center in Miami. Forecasters said the storm could strike the coast anywhere from South Carolina to New Jersey.
With bullish sentiment unabated and crude prices hitting consecutive highs this week, analysts expect front-month crude contracts to test the $70 a barrel threshold.
Light sweet crude for September delivery gained $1.30 to $67.10 on the New York Mercantile Exchange. On Thursday, oil prices settled at $65.80 a barrel, the highest close since Nymex trading began in 1983.
Gasoline futures climbed 4.42 cents to $1.994 a gallon while heating oil futures rose 1.65 cent to $1.915 a gallon.
In London, Brent crude for September delivery was trading at $65.94 a barrel, up 56 cents.
Analysts said gasoline demand, currently at its peak in the U.S. summer driving season, was pushing crude's gains. Last week, U.S. gasoline demand picked up by 1.4 per cent from a year ago, according to government data.
Coupled with new reports of refinery outages this week, traders fear U.S. refiners, already running at 95 per cent of capacity, are straining to satisfy the rising demand.
“People fear there won't be enough gasoline at a time when it's so greatly demanded, so they're just buying, buying and buying,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.
Oil prices are 46 per cent higher than a year ago, but they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980.
The U.S. Energy Department said Wednesday that gasoline inventories fell 2.1 million barrels to 203.1 million barrels last week.
“The refinery breakdowns are a big issue, they're happening at a time when gasoline supplies are already very tight,” Emori said.
Among the latest refinery outages: several units at ConocoPhillips' 306,000 barrel-a-day Wood River, Ill., refinery were shut after a thunderstorm caused a power failure at the plant.
Also, BP PLC shut down a hydrogen recovery unit Aug. 10 at its massive 470,000 barrel-a-day Texas City refinery, following a decision by the company to keep high-pressure units off line until they can be proven safe, BP spokesman Scott Dean said Thursday.
The three other high-pressure units at the refinery were already off line Wednesday and will be kept down pending investigations, Dean said.
The incidents are the latest in a string of outages to hit about a dozen U.S. refineries that together can process 2.7 million barrels a day of crude oil, some 16 per cent of total U.S. refining capacity.
——— Associated Press Writer Gillian Wong in Singapore contributed to this report.
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