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Oil nears 74 dollars a barrel on gasoline supply fears
AFP
NEW YORK
Petroleumworld.com 07 02 06
World oil prices climbed toward 74 dollars per barrel on Friday due to jitters over motor fuel supplies before a long holiday weekend in the United States, dealers said.
New York's main contract, light sweet crude for delivery in August, climbed 41 cents to close at 73.93 dollars per barrel. The contract earlier hit 74.15 dollars -- the highest point since May 3.
In London on Friday, Brent North Sea crude for August delivery surged 64 cents to 73.51 dollars per barrel in electronic deals after earlier touching 73.35, which was last seen May 12.
The New York Stock Exchange closed early and will remain closed Monday and Tuesday, making a long weekend of Tuesday's Fourth of July celebrations, a key event in Americans' vacation and driving plans.
"The Independence Day holiday weekend in the US starts (on Saturday) and demand for gasoline should be very high, much higher in fact than last year according to some sources," Sucden analyst Sam Tilley said.
Some 35 million Americans are expected to take to the roadways over the weekend, putting severe strain on the country's stocks of gasoline or petrol.
US gasoline stocks are under pressure amid the ongoing peak-demand driving season.
"Oil prices are continuing to gain support (on Friday) from strong underlying US demand for gasoline where consumption levels are continuing to rise despite prices that are up over 20 percent year-on-year," added Barclays Capital analyst Kevin Norrish.
Fimat analysts agreed, saying "demand looks quite resilient with American drivers expected to take to the road in record numbers during the July 4th weekend."
Prices also were underpinned by the continued closure of a key shipping channel in Louisiana, which has limited output at three refineries, Fimat said.
Bill O'Grady of AG Edwards also noted that a spate of refinery problems and supply disruptions were "adding to the bullish tone of the market."
Oil prices extended gains following a report Wednesday by the US Department of Energy showing steep falls in both gasoline and crude stockpiles.
Gasoline stocks in the US had fallen by one million barrels to 212.4 million in the week ended June 23, compared with market expectations of a rise of 450,000 barrels.
According to the DoE, demand for gasoline rose 1.2 percent in the week to 9.54 million barrels per day, matching a record high set in August 2005.
Crude prices are now within sight of record peaks. New York crude hit a record 75.35 dollars last April, while London Brent struck 74.97 dollars in May, on the back of heightened concerns over Iran, which had prompted frenzied speculative buying.
AFP 30 2059 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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