One wonders if these factors are all that explain the rise in prices. Perhaps there is some plain old price fixing to increase profits as well. It seems that as far as gasoline supplies are concerned that the US lacks refining capacity. What is hurricanes again hurt production in the Gulf?
Crude oil prices continue to advance
By GEORGE JAHN
Oil prices rose above $64 a barrel Friday after a surge in the previous session as traders reacted to warnings that OPEC production was at its lowest point in two years.
Unrest in OPEC member nations Iraq and Algeria also added to the pressure, as did fears that U.S. refinery outages could squeeze gasoline supplies as the summer driving season approaches.
Light, sweet crude for May delivery rose 59 cents to $64.4 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.
The contract rose almost $2 Thursday to close at $63.85 a barrel after the International Energy Agency warned that output by the Organization of Petroleum Exporting Countries had slid to its lowest level in more than two years on production outages and self-imposed cuts.
A Platts survey of OPEC production last month said the average 26.54 million barrels pumped a day by OPEC members still represented overproduction of 740,000 barrels a day above the group's production target.
The Brent crude contract for May delivery rose 72 cents to $69.44 a barrel on the ICE Futures exchange in London.
Oil prices were also supported after the U.S. government reported dwindling domestic gasoline stockpiles in the face of unflagging demand.
A further rise in gasoline demand was necessary to boost crude toward $70 a barrel, Ken Hasegawa of Tokyo brokerage Himawari CX told Dow Jones Newswires.
Total U.S. gasoline stockpiles sank by 5.5 million barrels last week to 199.7 million barrels, the U.S. Energy Information Administration reported Wednesday. Analysts had expected a 1.3 million barrel decline, according to a survey by Dow Jones Newswires.
"Several refinery glitches in the U.S. ... further raised worries concerning gasoline supply ahead of the summer driving reason," noted Vienna's PVM Oil Associates.
Geopolitics also remained a factor, shoring up sentiment after oil and gas-rich Algeria was rocked by bomb attacks Thursday, fueling worries about the oil producer's control over an Islamic insurgency that peaked in the 1990s.
A car bomb blasted the walls off the Algerian prime minister's office in Algiers which, along with two other coordinated attacks at a suburban police station, killed 33 people.
Separately Thursday, a suicide bomb attack hit the Iraqi parliament building in Baghdad -- located inside the Green Zone, the most heavily guarded area in the country.
"What is there about this environment that could possibly produce a conclusion that prices are coming down?" said Fimat USA analyst John Kilduff.
Oil prices have been volatile the last couple of weeks, gaining nearly $5 a barrel after Iran detained 15 British sailors and marines, dropping on their release last Thursday, and then sliding almost $3 Monday on expectations of oversupply at a key North American delivery point before slowly recovering somewhat.
In other Nymex trading, heating oil futures gained 1.57 cents to $1.9218 a gallon while natural gas prices added 6 cents to $7.984 per 1,000 cubic feet.