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Archive for Friday, April 1, 2005

Crude prices hit $55 a barrel

April 1, 2005

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Crude futures rallied above $55 a barrel Thursday, helped by rising prices for gasoline and heating oil and an investment bank report that said demand and tight supplies could cause a "super spike" that sends prices above $100 a barrel.

After climbing as high as $56.10 a barrel, light, sweet crude for May delivery settled at $55.40 a barrel on the New York Mercantile Exchange, an increase of $1.41. An intraday Nymex peak of $57.60 was set on March 17.

Brent crude futures rose $2.20 to settle at $54.29 on the International Petroleum Exchange. Heating oil rose more than 5 cents to finish at $1.6576 a gallon on the Nymex, while unleaded gasoline rose nearly 6 cents to $1.6549 a gallon.

On Wednesday, heating oil futures settled more than 5 cents higher and gasoline futures closed more than 2 cents higher following the release of U.S. government data that showed a drop in the nation's supply of gasoline and distillate fuel, which includes heating oil.

The report, which also showed a large increase in crude oil inventories, said gasoline demand during the past month was 2 percent higher than last year.

"I think the market is a little surprised that demand is staying pretty strong even with record-high prices," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York.

The average retail price of regular unleaded gasoline is $2.15 per gallon.

As for the Goldman Sachs report that raised the possibility of oil prices rising as high as $105 a barrel, Bentz said: "I don't think it's influencing traders that are in the oil industry," meaning traders who are buying and selling on behalf of clients that actually produce or refine petroleum. Bentz said the report likely had influenced speculators by justifying already high prices.

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