Oil Near Three-Week High on Signs U.S. Gasoline Demand Rising
June 27 -- Crude oil traded near a three-week high in New York on speculation rising gasoline demand may soon start draining U.S. fuel stockpiles.
U.S. gasoline inventories last week probably rose by 400,000 barrels, the smallest gain forecast in the past two months, an Energy Department report may show tomorrow, based on a Bloomberg News survey of nine analysts. Gasoline supplies in the world's biggest oil consumer were 213.4 million barrels, 1.2 percent less than a year ago, the department said last week.
``Unleaded gasoline is definitely giving strong support to the crude oil market,'' said Mike Sander, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``It's the summer driving season and you've got the fourth of July coming up and people are going to be driving'' during the Independence Day holiday weekend, he said.
Crude oil for August delivery was at $71.83, up 3 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:09 a.m. in Sydney. Prices today are 19 percent higher than a year ago.
The August contract rose 93 cents, or 1.3 percent, to $71.80 a barrel yesterday, the highest close since June 6. Oil reached $75.35 on April 21, the highest since New York trading began in 1983.
``The realization that gasoline supplies have probably topped out is sending prices higher,'' Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago, said yesterday. ``Demand has been pretty solid and may pick up.''
Gasoline Rally
Gasoline for July delivery was at $2.1760 a gallon in after-hours trading, after rising 2.4 percent to $2.1788 yesterday, the highest close since June 6. Prices rose 9.4 percent in straight gains the five previous sessions.
Gasoline jumped 3 percent on June 21, when the Energy Department's report showed stockpiles of the fuel rose 294,000 barrels in the week ended June 16, a fifth of the gain forecast.
Consumption in the four-week period averaged 9.41 million barrels a day, 0.9 percent higher than a year earlier, the department said last week.
Gasoline closing above $2.20 a gallon would be a ``very bullish sign'' for the energy markets, Altavest's Sander said. ``Iran is still just sitting in the background'' also supporting oil prices, he said.
Oil has risen 18 percent this year, in-part on concern that Iran, the world's fourth-largest oil producer, may cut exports in its dispute with the United Nations over its nuclear program.
`Ultimate' Weapon
Iran will disrupt oil supplies only as the ``ultimate'' weapon in the conflict over its nuclear program, government spokesman Gholam Hossein Elham said yesterday.
The U.S. and European Union are trying to convince Iran to drop its nuclear fuel ambitions by offering technology and trade incentives in exchange for the nation ceasing its uranium enrichment work.
Conditions are ``favorable for solving the nuclear issue diplomatically,'' the state-run Islamic Republic News Agency cited Elham as telling reporters at a news conference in Tehran yesterday. Disrupting oil supplies is the ``ultimate'' option and ``we don't see the necessity to plan such matters in the current atmosphere and with the given conditions.''
June 27 -- Crude oil traded near a three-week high in New York on speculation rising gasoline demand may soon start draining U.S. fuel stockpiles.
U.S. gasoline inventories last week probably rose by 400,000 barrels, the smallest gain forecast in the past two months, an Energy Department report may show tomorrow, based on a Bloomberg News survey of nine analysts. Gasoline supplies in the world's biggest oil consumer were 213.4 million barrels, 1.2 percent less than a year ago, the department said last week.
``Unleaded gasoline is definitely giving strong support to the crude oil market,'' said Mike Sander, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``It's the summer driving season and you've got the fourth of July coming up and people are going to be driving'' during the Independence Day holiday weekend, he said.
Crude oil for August delivery was at $71.83, up 3 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:09 a.m. in Sydney. Prices today are 19 percent higher than a year ago.
The August contract rose 93 cents, or 1.3 percent, to $71.80 a barrel yesterday, the highest close since June 6. Oil reached $75.35 on April 21, the highest since New York trading began in 1983.
``The realization that gasoline supplies have probably topped out is sending prices higher,'' Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago, said yesterday. ``Demand has been pretty solid and may pick up.''
Gasoline Rally
Gasoline for July delivery was at $2.1760 a gallon in after-hours trading, after rising 2.4 percent to $2.1788 yesterday, the highest close since June 6. Prices rose 9.4 percent in straight gains the five previous sessions.
Gasoline jumped 3 percent on June 21, when the Energy Department's report showed stockpiles of the fuel rose 294,000 barrels in the week ended June 16, a fifth of the gain forecast.
Consumption in the four-week period averaged 9.41 million barrels a day, 0.9 percent higher than a year earlier, the department said last week.
Gasoline closing above $2.20 a gallon would be a ``very bullish sign'' for the energy markets, Altavest's Sander said. ``Iran is still just sitting in the background'' also supporting oil prices, he said.
Oil has risen 18 percent this year, in-part on concern that Iran, the world's fourth-largest oil producer, may cut exports in its dispute with the United Nations over its nuclear program.
`Ultimate' Weapon
Iran will disrupt oil supplies only as the ``ultimate'' weapon in the conflict over its nuclear program, government spokesman Gholam Hossein Elham said yesterday.
The U.S. and European Union are trying to convince Iran to drop its nuclear fuel ambitions by offering technology and trade incentives in exchange for the nation ceasing its uranium enrichment work.
Conditions are ``favorable for solving the nuclear issue diplomatically,'' the state-run Islamic Republic News Agency cited Elham as telling reporters at a news conference in Tehran yesterday. Disrupting oil supplies is the ``ultimate'' option and ``we don't see the necessity to plan such matters in the current atmosphere and with the given conditions.''
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