21 May 2007 - 13:25
  • News Code: 105183

Oil prices climbed above $65 a barrel in Asian trading Monday on continued concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

Light, sweet crude for June delivery gained 30 cents to $65.24 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

 

The contract rose 8 cents to settle at $64.94 Friday after jumping $2.31 in the previous session.

 

Brent crude for July delivery climbed 50 cents to $69.92 a barrel on the ICE Futures exchange in London.

 

With the Northern Hemisphere"s summer driving season set to begin in just over a week, energy traders have been concerned that gasoline supplies won"t meet demand. A string of planned and unexpected refinery shutdowns have fueled such worries.

 

"It will continue to be an issue. If demand is strong this season, it"s going to be hard to keep up and it will push prices," said Tobin Gorey, a commodity strategist with Commonwealth Bank of Australia in Sydney.

 

The U.S. Energy Information Administration reported last Wednesday that gasoline stocks -- while increasing to 195.2 million barrels for the week ended May 12 -- remained well below the average for this time of year.

 

Oil prices were also supported by the political situation in Nigeria, a major oil producer.

 

Nigerian labor leaders on Thursday called a two-day strike later in May to protest last month"s elections. The strike is scheduled for May 28 to coincide with the inauguration of a new government. The unions say that the April elections, which gave a sweeping victory to President-elect Umaru Yar"Adua and the ruling People"s Democratic Party, were fraudulent.

 

Gorey said the market did not expect the planned strike to have a significant impact on crude futures.

 

"We"re not very sure how long it will last," he said. "It"s not an issue that is necessarily having too much influence on the market now."

 

In other Nymex trading, heating oil futures gained 0.88 cent to $1.9240 a gallon while natural gas prices lost 3.2 cents to $7.912 per 1,000 cubic feet.

 

PIN/BUSINESSWEEK

News Code 105183

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