Oil jumps above $73
LONDON, May 11 (Reuters) - Oil climbed above $73 a barrel on Thursday, boosted by worries over gasoline supply in the United States as the peak demand summer driving season looms in the world's top consumer.
The climb is part of a broader rally in commodities as money from investment funds flows into the once-disparate group of small, illiquid markets. Copper hit a record high and gold reached a 25-year peak on Thursday.
Outages at U.S. oil refineries, including the closure of a unit at Valero Energy Corp's Texas City 243,000-bpd plant, pushed prices higher, outweighing U.S. government data on Wednesday showing gasoline inventories rose.
"The main factor was the problems at Valero's refinery, which is igniting concerns about gasoline," said Kevin Norrish of Barclays Capital. "It's an indication of how sensitive the market is to any news of supply problems right now."
U.S. crude gained $1.60 to $73.73 a barrel by 1355 GMT, after rising by $1.44 on Wednesday. London Brent crude rose $1.19 to $73.63 a barrel.
Oil in the U.S. is about 2 percent below last month's record high of $75.35 because of supply losses in Nigeria, tension over Iran's nuclear work and more buying of commodities by funds seeking to beat returns of other assets like equities.
Gasoline supplies in the U.S. are a major concern for oil markets ahead of the summer driving season when demand peaks.
Valero said on Wednesday a coking unit at the Texas City refinery will shut for a week for work and the outage would cut gasoline output by 15,000 bpd.
ConocoPhillips Corp. also cut processing rates at its 263,000-bpd Bayway refinery in New Jersey due to problems with some units.
NIGERIA KIDNAPPINGS
Oil also climbed as at least two foreign oil workers, including one Italian, were kidnapped in Nigeria's oil capital Port Harcourt on Thursday, renewing concern about the stability of flows from the world's eighth largest exporter.
The kidnapping comes a day after a U.S. oil executive was shot dead in the same city and as almost a quarter of the country's output remains shut down after attacks by rebels.
A militant group waging a campaign of attacks on Nigeria's oil industry said it was not involved in the abduction, which police and industry sources attributed to a community dispute.
Oil's rally from below $20 a barrel in January 2002 has yet to derail economic growth, suggesting consumers and businesses are living with higher fuel costs.
European shares hit a fresh near five-year high on Thursday after further bullish corporate earnings from the likes of cement maker Holcim.
"There's nothing yet to suggest oil prices are going to induce a slowdown," Barclays' Norrish said. "We've got used to higher oil prices."
Goldman Sachs could raise its year-end U.S. crude price forecast above $70 because of stronger-than-expected global growth, the bank said in a research note.
"We believe the outlook on petroleum remains positive despite the current historically high price levels," it wrote.
Tensions between Iran, the world's fourth largest oil exporter, and the West over Tehran's nuclear programme have also helped underpin price gains this year.
The head of the U.N. nuclear watchdog appealed for a diplomatic solution to the crisis on Thursday as Iranian President Mahmoud Ahmadinejad said he was ready to talk.
"I hope both sides will move away from the war of words, I hope the pitch will go down, I hope people will adopt a cool-headed approach," Mohamed ElBaradei, head of the International Atomic Energy Agency said in Amsterdam.
The climb is part of a broader rally in commodities as money from investment funds flows into the once-disparate group of small, illiquid markets. Copper hit a record high and gold reached a 25-year peak on Thursday.
Outages at U.S. oil refineries, including the closure of a unit at Valero Energy Corp's
"The main factor was the problems at Valero's refinery, which is igniting concerns about gasoline," said Kevin Norrish of Barclays Capital. "It's an indication of how sensitive the market is to any news of supply problems right now."
U.S. crude gained $1.60 to $73.73 a barrel by 1355 GMT, after rising by $1.44 on Wednesday. London Brent crude
Oil in the U.S. is about 2 percent below last month's record high of $75.35 because of supply losses in Nigeria, tension over Iran's nuclear work and more buying of commodities by funds seeking to beat returns of other assets like equities.
Gasoline supplies in the U.S. are a major concern for oil markets ahead of the summer driving season when demand peaks.
Valero said on Wednesday a coking unit at the Texas City refinery will shut for a week for work and the outage would cut gasoline output by 15,000 bpd.
ConocoPhillips Corp.
NIGERIA KIDNAPPINGS
Oil also climbed as at least two foreign oil workers, including one Italian, were kidnapped in Nigeria's oil capital Port Harcourt on Thursday, renewing concern about the stability of flows from the world's eighth largest exporter.
The kidnapping comes a day after a U.S. oil executive was shot dead in the same city and as almost a quarter of the country's output remains shut down after attacks by rebels.
A militant group waging a campaign of attacks on Nigeria's oil industry said it was not involved in the abduction, which police and industry sources attributed to a community dispute.
Oil's rally from below $20 a barrel in January 2002 has yet to derail economic growth, suggesting consumers and businesses are living with higher fuel costs.
European shares hit a fresh near five-year high on Thursday after further bullish corporate earnings from the likes of cement maker Holcim
"There's nothing yet to suggest oil prices are going to induce a slowdown," Barclays' Norrish said. "We've got used to higher oil prices."
Goldman Sachs
"We believe the outlook on petroleum remains positive despite the current historically high price levels," it wrote.
Tensions between Iran, the world's fourth largest oil exporter, and the West over Tehran's nuclear programme have also helped underpin price gains this year.
The head of the U.N. nuclear watchdog appealed for a diplomatic solution to the crisis on Thursday as Iranian President Mahmoud Ahmadinejad said he was ready to talk.
"I hope both sides will move away from the war of words, I hope the pitch will go down, I hope people will adopt a cool-headed approach," Mohamed ElBaradei, head of the International Atomic Energy Agency said in Amsterdam.
Post a Comment