Skip to comments.Oil rises near $64; gasoline hits record high
Posted on 08/08/2005 9:51:17 AM PDT by M. Espinola
Crude oil futures hit more record highs Monday, nearing US$64 a barrel, reflecting market fears over the U.S. embassy closure in Saudi Arabia and concerns that shutdowns of U.S. oil refineries would reduce supply.
Light, sweet crude for September delivery rose to a high of US$63.95 on the New York Mercantile Exchange before falling back a bit to US$63.75, up US$1.44 at midday.
Prices had settled at US$62.31 a barrel on Friday, a record close for crude since Nymex trading began in 1983.
"The market clearly has the jitters," said Deborah White, energy analyst at SG Securities in Paris.
The Nymex rally received a big boost from blistering gains in gasoline futures, which rose to a new front-month record high of US$1.8690 a gallon, up 3.68 cents, in September. The high, which tops gasoline's last record of US$1.8600 a gallon July 8, reflects the worsening refinery-outage situation in the U.S. that has tightened product supply amid scorching demand for fuel.
Nymex heating oil futures for September traded as high as US$1.7900 a gallon, up 5.88 cents, but remained more than 2 cents off their July 7 record high of US$1.8125 a gallon.
"We had a much lower-than-expected build in natural gas supplies in the U.S. last week and this is also adding to general nervousness," White said.
In London, Brent blend crude futures for September rose as much as US$1.63 to a record high of US$62.70 a barrel on the International Petroleum Exchange.
The market was on edge following Sunday's announcement of a security threat against U.S. government buildings in Saudi Arabia, the world's biggest petroleum producing country.
The planned closure Monday and Tuesday of the U.S. Embassy in Riyadh and consulates in Jiddah and Dhahran was "in response to a threat against U.S. government buildings" in the kingdom, the embassy said, adding it would also limit nonofficial travel of its mission personnel.
It urged Americans residing in Saudi Arabia to keep "a high level of vigilance," but did not elaborate on the nature of the threat.
Meanwhile, analysts said U.S. economic figures on Friday showing payrolls expanded by 207,000 in July, the highest reading in five months, continued to boost bullish sentiment in the market.
"The U.S. economy looks healthy and it's safe to infer that the demand for oil and diesel will remain pretty firm and that the price of oil should be helped along as well," said commodities strategist David Thurtell of Commonwealth Bank of Australia in Sydney.
Oil prices rose even though the Organization of Petroleum Exporting Countries said late Friday that it increased oil production by 300,000 barrels a day in the past two weeks, to around 30.4 million barrels daily.
The market appeared to have largely disregarded the move, as concerns over refinery outages continued to weigh on traders' minds in a time when most refiners are running at full tilt.
ConocoPhillips was the latest to suffer a refinery outage. The company reported planned work and unexpected operational upsets at its 145,800-barrel-a-day refinery in Borger, Texas. The plant's sulfur recovery unit was shut Friday, with a restart planned for Wednesday.
Meantime, a fire broke out at a unit of Sunoco Inc.'s 330,000 barrels-a-day Philadelphia refinery over the weekend, the Philadelphia Inquirer reported Sunday, citing a company spokesman.
The outages have affected approximately 3 percent of the refining capacity in the United States, according to Barclays Capital.
At least seven other U.S. refineries have reported problems of one kind or another in the last two weeks.
Pool on the day it first hits $100/barrel?
Can you believe this? $70 a barrel!! I get a shock every time I go to the gas station and fill up.
So much for the "No war for Oil" crowd. Funny how we haven't heard much from them lately, huh?
There's no reason we shouldn't have FLEX spending accounts for gasoline. We're paying so much in fuel taxes, we should be able to pay for fuel before taxes come out of our paychecks...
Yet, we continue to sit on our butts and have not sunk one well in the ANWAR. Not one.
Sorry for the above post, that should have gone to the guy suggesting that $70 a barrel wasn't too far off.
$100/barrel is still a 2-3 years into the future, unless something of cataclysmic proportions takes place in the ME, like nukes being exploded in Israel by al Qaida, as is foreseen by some in the intelligence field.
Well I'm soooooooooooooooooooooo glad we won't be drilling in ANWR............ /sarc
We are sinking; The dollar is going down fast. Greenspan will have to crank up the rate to stabalize the dollar - and fuel prices; but, how much room does he have before he pops the housing/credit bubble?
Not bad, I like the way you think!
Gas prices have NOT hit record levels yet.
If disruptive terrorist/sabotage attacks take place against the oil fields of Saudi Arabia, we could be looking at well over $100 in total panic buying. OPEC's "nuclear" Iran is another wild card in the making.
Those suckers who laughed when crude had reversed back to $30ish during the Fall of 2003, and I repeatedly stated she was heading to over $50, I bet with every fill up they are crying, not laughing.
I tell you, the bottom is going to fall out.
Yeah, but we're extending Daylight Savings Time by a month.
Surely that will help.
"Gas prices have NOT hit record levels yet."
They haven't? About $2.70/gl for regular in my neck of the neighborhood?
Adjusted for inflation, gas exceeded $3 a gallon in 1980.
$3.00 plus per gallon in California is a record to me.
Okay, I am not an economist by any stretch. I agree with you on this, but what do you feel will be the repercussions? Being in Mighigan I KNOW the ramifications here because of the auto industry. What about other states and the possible effects?
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