NEW YORK - Oil rallied back from early
losses on Thursday to strike a fresh record above $124 a barrel
as strong diesel demand outweighed signs of rising OPEC
supplies. U.S. crude CLc1 traded up to an all-peak of $124.61 a
barrel in late activity, after settling up 16 cents at $123.69.
London Brent crude LCOc1 rose $1.47 to $123.79 a barrel, after
settling 52 cents higher at $122.84. Oil rallied late on the strength of middle distillates,
including diesel, on growing demand for transport fuel in Europe
and power demand in emerging economies. A recent strike at the UK's Grangemouth refinery and
production problems at the Porvoo refinery diesel unit in
Finland have also thinned supplies. Shortages of alternate fuels in China, South Africa, Latin
America and parts of the Middle East have also set off a
worldwide boom in demand for diesel for use in electric
generators. [ID:nN25293667] Further strength came from a U.S. government inventory
report on Wednesday that showed U.S. distillate supplies down
last week. "There's a continuation of the strength in the middle
distillate market that we've seen for a while now," said Eric
Wittenauer, analyst at Wachovia Securities. "On a global scale, you have a combination of growth in
industrial use and for heating purposes and for transport in
Europe." Prices fell earlier on news top oil exporter Saudi Arabia
booked eight supertankers to carry 16 million barrels of crude
to the United States in May and early June, the highest number
of cargoes so far this year. [ID:nL08786951 OPEC exports, excluding Angola and Ecuador, are expected to
rise 220,000 barrels per day (bpd) in the four weeks to May 24,
forecast British consultancy Oil Movements. [nENG000416] Oil prices have surged five-fold since 2002, as supply
struggles to match growing demand in emerging economies, and
Goldman Sachs earlier this week forecast prices could rocket to
$200 in the next two years. A surge in speculative buying from investors hedging against
inflation and the falling dollar has also lifted prices since
September. Oil has jumped about $13 since late last week alone. High fuel costs have battered the troubled U.S. economy, and
U.S. President George W. Bush is expected to again ask OPEC to
increase output when he travels to Saudi Arabia next week.
[ID:nL08639115] OPEC Secretary General Abdullah al-Badri on Thursday
insisted oil markets are well supplied but added the cartel
could pump more to keep up with demand. [nL08786046]"There is clearly no shortage of oil in the market," he said
in a statement.
losses on Thursday to strike a fresh record above $124 a barrel
as strong diesel demand outweighed signs of rising OPEC
supplies. U.S. crude CLc1 traded up to an all-peak of $124.61 a
barrel in late activity, after settling up 16 cents at $123.69.
London Brent crude LCOc1 rose $1.47 to $123.79 a barrel, after
settling 52 cents higher at $122.84. Oil rallied late on the strength of middle distillates,
including diesel, on growing demand for transport fuel in Europe
and power demand in emerging economies. A recent strike at the UK's Grangemouth refinery and
production problems at the Porvoo refinery diesel unit in
Finland have also thinned supplies. Shortages of alternate fuels in China, South Africa, Latin
America and parts of the Middle East have also set off a
worldwide boom in demand for diesel for use in electric
generators. [ID:nN25293667] Further strength came from a U.S. government inventory
report on Wednesday that showed U.S. distillate supplies down
last week. "There's a continuation of the strength in the middle
distillate market that we've seen for a while now," said Eric
Wittenauer, analyst at Wachovia Securities. "On a global scale, you have a combination of growth in
industrial use and for heating purposes and for transport in
Europe." Prices fell earlier on news top oil exporter Saudi Arabia
booked eight supertankers to carry 16 million barrels of crude
to the United States in May and early June, the highest number
of cargoes so far this year. [ID:nL08786951 OPEC exports, excluding Angola and Ecuador, are expected to
rise 220,000 barrels per day (bpd) in the four weeks to May 24,
forecast British consultancy Oil Movements. [nENG000416] Oil prices have surged five-fold since 2002, as supply
struggles to match growing demand in emerging economies, and
Goldman Sachs earlier this week forecast prices could rocket to
$200 in the next two years. A surge in speculative buying from investors hedging against
inflation and the falling dollar has also lifted prices since
September. Oil has jumped about $13 since late last week alone. High fuel costs have battered the troubled U.S. economy, and
U.S. President George W. Bush is expected to again ask OPEC to
increase output when he travels to Saudi Arabia next week.
[ID:nL08639115] OPEC Secretary General Abdullah al-Badri on Thursday
insisted oil markets are well supplied but added the cartel
could pump more to keep up with demand. [nL08786046]"There is clearly no shortage of oil in the market," he said
in a statement.
