Crude Oil Rises as Global Economic Growth Spurs Fuel Demand
May 11 (Bloomberg) -- Crude oil rose approached $74 a barrel as an expanding world economy increased demand for energy and metals and tensions in Iran and Nigeria threatened supply.
Global fuel use will jump 1.9 percent this year, the U.S. government reported this week. Cooper, nickel and zinc climbed to records and gold touched a 26-year high today on signs rising prices aren't cutting demand. The U.S. wants the United Nations Security Council to pass a resolution that would pressure Iran to stop nuclear research in the fourth-biggest oil producer.
``We are in the midst of a continuing massive commodity rally,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``With gold and copper surging, oil isn't going to just stand by. Investment dollars are pouring in because the returns are better and strong global economic growth is feeding into demand fears.''
Crude oil for June delivery rose 62 cents, or 0.9 percent, to $72.75 a barrel at 12:59 p.m. on the New York Mercantile Exchange. Oil touched $73.90, the highest since May 3. Futures reached $75.35 on April 21 and 24, the highest since trading began in 1983. Prices are up 44 percent from a year ago.
Brent crude oil for June settlement increased 35 cents, or 0.5 percent, to $72.79 a barrel on the London-based ICE Futures exchange. Futures touched $74.97 a barrel May 2 and 3, the highest since the contract began trading in 1988.
Concern that the standoff over Iran's nuclear research would lead to sanctions against the Islamic republic has contributed to a 21 percent jump in prices this year. The increase in tension comes as militant attacks cut Nigerian and Iraqi production.
Metals Rally
The London Metal Exchange today reported the biggest daily drop in copper stockpiles in five weeks, as declining supplies from the world's mines forced wire and pipemakers to use inventory. Demand will climb 5.7 percent this year, compared with 1.8 percent in 2005, according to Citigroup Inc.
Copper for delivery in three months on the LME rose $470, or 5.8 percent, to $8,540 a metric ton as of 4:17 p.m. London time. Earlier it traded as high as $8,800, the third consecutive day it's touched a record. Zinc also rose on the LME to a record $4,000 a ton. Nickel rose to an all-time high of $21,200 while aluminum gained to 17-year high of $3,310.
Gold for immediate delivery rose $12.00, or 1.7 percent, to $719.90 an ounce in London. Prices earlier reached $726.70, the highest since January 1980.
Open To Negotiations
Iranian President Mahmoud Ahmadinejad said he is open to solving a dispute over his nation's nuclear program in diplomatic negotiations. Ahmadinejad, who is visiting Indonesia, said in an interview today that he regretted U.S. President George W. Bush's ``arrogant'' behavior in not responding to a letter from him and wants the U.S. to drop its ``bad attitude.''
The U.K. and France, backed by the U.S., proposed a resolution to the United Nations Security Council on May 3 demanding Iran cease uranium enrichment, and said they would seek sanctions should the government in Tehran fail to comply.
An Italian working for Saipem SpA in Nigeria was among several foreigners kidnapped today, a Foreign Ministry spokesman said. The abduction follows the death yesterday of an employee of Baker Hughes Inc., the world's third-largest oilfield services provider, who was shot in Port Harcourt while traveling to work.
Nigerian output has been cut by about a fifth since February attacks by militias on oil pipelines and the Forcados oil export terminal. Nigeria was the fourth-biggest supplier of oil to the U.S. in February, the most recent month available.
Iran produced 3.85 million barrels of crude oil a day last month, according to a Bloomberg News survey. The U.S. does not import oil from Iran and has had sanctions on the country since the Islamic Revolution in 1979. Nigeria pumped 2.08 million barrels of oil a day in April. The two countries account for 7 percent of world production.
Gasoline Consumption
``The kidnapping of foreign contract workers in Nigeria is pushing prices higher,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. ``On top of that we have the strong gasoline demand number, which points to possible supply problems.''
Implied demand for gasoline in the U.S. averaged 9.35 million barrels a day last week, up 2.7 percent from the prior week, according to an Energy Department report yesterday.
Prices also rose on concern that there will be an increase in refinery breakdowns as companies boost operating rates in advance of the summer driving season. Valero Energy Corp. said yesterday that a coking unit at its Texas City, Texas, refinery would be shut through next week. Gasoline production would be cut by 15,000 barrels a day, the company said.
Gasoline Prices
Gasoline for June delivery slipped 0.19 cent to $2.1675 a gallon in New York. Prices touched $2.225, the highest since April 24. Futures are up 46 percent from a year ago.
Pump prices have followed futures higher. Regular gasoline, averaged nationwide, jumped 7.4 percent in the past month, according to AAA, the nation's largest motorist organization. The price is up 32 percent from a year ago. Gasoline fell 0.4 cent to $2.885 a gallon yesterday.
The value of sales at filling stations jumped 4.6 percent last month, the most since September, to $36.1 billion, the Commerce Department said today in Washington.
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May 11 (Bloomberg) -- Crude oil rose approached $74 a barrel as an expanding world economy increased demand for energy and metals and tensions in Iran and Nigeria threatened supply.
Global fuel use will jump 1.9 percent this year, the U.S. government reported this week. Cooper, nickel and zinc climbed to records and gold touched a 26-year high today on signs rising prices aren't cutting demand. The U.S. wants the United Nations Security Council to pass a resolution that would pressure Iran to stop nuclear research in the fourth-biggest oil producer.
``We are in the midst of a continuing massive commodity rally,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``With gold and copper surging, oil isn't going to just stand by. Investment dollars are pouring in because the returns are better and strong global economic growth is feeding into demand fears.''
Crude oil for June delivery rose 62 cents, or 0.9 percent, to $72.75 a barrel at 12:59 p.m. on the New York Mercantile Exchange. Oil touched $73.90, the highest since May 3. Futures reached $75.35 on April 21 and 24, the highest since trading began in 1983. Prices are up 44 percent from a year ago.
Brent crude oil for June settlement increased 35 cents, or 0.5 percent, to $72.79 a barrel on the London-based ICE Futures exchange. Futures touched $74.97 a barrel May 2 and 3, the highest since the contract began trading in 1988.
Concern that the standoff over Iran's nuclear research would lead to sanctions against the Islamic republic has contributed to a 21 percent jump in prices this year. The increase in tension comes as militant attacks cut Nigerian and Iraqi production.
Metals Rally
The London Metal Exchange today reported the biggest daily drop in copper stockpiles in five weeks, as declining supplies from the world's mines forced wire and pipemakers to use inventory. Demand will climb 5.7 percent this year, compared with 1.8 percent in 2005, according to Citigroup Inc.
Copper for delivery in three months on the LME rose $470, or 5.8 percent, to $8,540 a metric ton as of 4:17 p.m. London time. Earlier it traded as high as $8,800, the third consecutive day it's touched a record. Zinc also rose on the LME to a record $4,000 a ton. Nickel rose to an all-time high of $21,200 while aluminum gained to 17-year high of $3,310.
Gold for immediate delivery rose $12.00, or 1.7 percent, to $719.90 an ounce in London. Prices earlier reached $726.70, the highest since January 1980.
Open To Negotiations
Iranian President Mahmoud Ahmadinejad said he is open to solving a dispute over his nation's nuclear program in diplomatic negotiations. Ahmadinejad, who is visiting Indonesia, said in an interview today that he regretted U.S. President George W. Bush's ``arrogant'' behavior in not responding to a letter from him and wants the U.S. to drop its ``bad attitude.''
The U.K. and France, backed by the U.S., proposed a resolution to the United Nations Security Council on May 3 demanding Iran cease uranium enrichment, and said they would seek sanctions should the government in Tehran fail to comply.
An Italian working for Saipem SpA in Nigeria was among several foreigners kidnapped today, a Foreign Ministry spokesman said. The abduction follows the death yesterday of an employee of Baker Hughes Inc., the world's third-largest oilfield services provider, who was shot in Port Harcourt while traveling to work.
Nigerian output has been cut by about a fifth since February attacks by militias on oil pipelines and the Forcados oil export terminal. Nigeria was the fourth-biggest supplier of oil to the U.S. in February, the most recent month available.
Iran produced 3.85 million barrels of crude oil a day last month, according to a Bloomberg News survey. The U.S. does not import oil from Iran and has had sanctions on the country since the Islamic Revolution in 1979. Nigeria pumped 2.08 million barrels of oil a day in April. The two countries account for 7 percent of world production.
Gasoline Consumption
``The kidnapping of foreign contract workers in Nigeria is pushing prices higher,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. ``On top of that we have the strong gasoline demand number, which points to possible supply problems.''
Implied demand for gasoline in the U.S. averaged 9.35 million barrels a day last week, up 2.7 percent from the prior week, according to an Energy Department report yesterday.
Prices also rose on concern that there will be an increase in refinery breakdowns as companies boost operating rates in advance of the summer driving season. Valero Energy Corp. said yesterday that a coking unit at its Texas City, Texas, refinery would be shut through next week. Gasoline production would be cut by 15,000 barrels a day, the company said.
Gasoline Prices
Gasoline for June delivery slipped 0.19 cent to $2.1675 a gallon in New York. Prices touched $2.225, the highest since April 24. Futures are up 46 percent from a year ago.
Pump prices have followed futures higher. Regular gasoline, averaged nationwide, jumped 7.4 percent in the past month, according to AAA, the nation's largest motorist organization. The price is up 32 percent from a year ago. Gasoline fell 0.4 cent to $2.885 a gallon yesterday.
The value of sales at filling stations jumped 4.6 percent last month, the most since September, to $36.1 billion, the Commerce Department said today in Washington.
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