hmmm?

  1. 870 Posts.
    The second last paragraph - is it a matter of time?

    Crude Oil Jumps to 13-Year High on Falling Gasoline Supplies
    March 17 (Bloomberg) -- Crude oil futures closed above $38 a barrel for the first time since the 1990-91 Persian Gulf War, after the U.S. Energy Department reported a decline in nationwide gasoline inventories.

    The 800,000 barrel drop last week left gasoline supplies at 199.6 million barrels, the lowest since November, while demand of 9 million barrels a day was the highest so far this year. Supplies fell as refineries unexpectedly cut their processing rates at a time when they usually build motor-fuel reserves for the peak-use summer months.

    ``Demand just keeps growing in spite of high prices,'' said Phil Flynn, senior energy trader for Alaron Trading Corp. in Chicago. ``This is setting us up for a very bad summer driving season.''

    Crude oil for April delivery rose 70 cents, or 1.9 percent, to settle at $38.18 a barrel on the New York Mercantile Exchange, the highest settlement price since Oct. 16, 1990, when Iraqi troops were occupying Kuwait.

    Oil rose to $38.35 during the session, the highest intraday price since Feb. 27, 2003. Prices were 9.3 percent higher than a year earlier, when U.S. and U.K. troops were preparing to invade Iraq.

    Gasoline for April delivery rose 3.13 cents, or 2.8 percent, to settle at $1.1577 in New York, the highest close since May 23, 2001. Prices rose as high as $1.163.

    The department released its weekly report on U.S. petroleum inventories, production and imports at 10:30 a.m. Washington time.

    Demand for gasoline averaged more than 8.9 million barrels a day during the past four weeks, 0.9 percent higher than last week and 4.5 percent higher than the same period in 2003.

    Record Pump Prices

    Motorists are already paying record prices with peak fuel demand more than two months away. The average retail price for self-serve gasoline rose about 1 cent the past two weeks to $1.74 a gallon as of Friday, said Trilby Lundberg, president of Camarillo, California-based Lundberg Survey Inc., citing a survey of about 8,000 gasoline stations.

    Gasoline imports fell 8.5 percent to 934,000 barrels a day, according to the report. The U.S. may find it difficult to import enough gasoline to make up for domestic shortages when demand increases, said George Gaspar, an energy analyst with Robert W. Baird & Co. in Milwaukee.

    ``There will be greater competition for the European gasoline so we'll have to pay more for it,'' Gaspar said. ``The formulation changes in New England and the East Coast will obviously make it a bigger challenge to get supplies.''

    New York, California and at least 15 other states have banned the petrochemical additive known as MTBE in cleaner- burning reformulated gasoline and shifted to an ethanol blend. Rules requiring lower sulfur content in gasoline also took effect this year in the U.S.

    Gasoline Supports Crude Oil

    ``Oil is being held up by gasoline,'' Gaspar said. ``If the complications in the gasoline market are solved you will see oil tumble.''

    Crude-oil supplies increased 1.6 million barrels to 281.1 million in the week ended March 12, the department said. Demand may grow faster than inventories because of robust economic growth in the U.S., China and Japan, the three biggest oil consumers, analysts said.

    The nation's refiners slowed operations by 1.5 percentage points to 87.6 percent of capacity last week, which was also 1.2 percent below year-earlier levels, the department said. Analysts had expected processing rates to rise to 89.6 percent. Refiners usually boost operating levels after performing maintenance at this time of year to meet summer gasoline demand.

    Refinery Maintenance

    ``The dip in maintenance is a surprise that warrants concern,'' said Tim Evans, senior energy analyst at IFR Markets in New York. ``They should be boosting product output now.''

    Expectations that the Organization of Petroleum Exporting Countries will proceed with a production cut in April have also helped push prices to recent highs, traders said.

    In London, the May Brent crude-oil futures contract rose 85 cents, or 2.6 percent, to settle at $33.53 a barrel on the International Petroleum Exchange, the highest settlement price since March 12, 2003.

    Baghdad Explosion

    At least 27 people were killed in an explosion at a central Baghdad hotel that a U.S. soldier said was consistent with the characteristics of a car bomb, the Associated Press reported. Violence in Iraq isn't having a noticeable effect on exports, analysts said.

    ``The ongoing series of tragic events in Iraq is having a minimal effect on oil markets,'' said Tim Evans, senior energy analyst at IFR Markets in New York. ``Until an attack actually hits an oil instillation and limits production and exports, this will remain the case.''

    Iraq, which holds the world's second-largest crude-oil reserves, is exporting about 1.77 million barrels a day, Asim Jihad, a spokesman for the Iraqi Oil Ministry, said yesterday. That is 25 percent more than February, and follows the resumption of operation of the country's oil pipeline to the Turkish port of Ceyhan and of the Khor al-Amaya oil terminal on the Persian Gulf.



 
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