Crude oil at new high just above $114; gas also at a record
NEW YORK — Energy traders rewrote the record books again Tuesday, pushing oil futures past $114 a barrel as gasoline and diesel prices struck new highs of their own at the pump.
Light, sweet crude for May delivery jumped as high as $114.08 a barrel shortly after regular trading ended on the New York Mercantile Exchange. That is nearly $2 above an intraday high set last week.
Concerns about insufficient global supply, stoked by a high-profile report by the International Energy Agency that said Russian oil production dropped this year for the first time in a decade, was largely responsible for the surge. Oil prices rose as high as $113.99 a barrel during the regular session before settling at $113.79, up $2.03 from Monday's record close of $111.76 a barrel.
"In an emotionally driven market like we've got now, it just doesn't take much in the way of a headline to prompt a psychological response," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.
Prices at the pump also charged ahead. Retail gasoline prices rose to a new average national record of $3.386, according to AAA and the Oil Price Information Service. Prices were highest in California, where mid-range and higher grades are now averaging more than $4 a gallon.
Diesel prices at the pump jumped to $4.119 a gallon, also a record, setting the stage for even higher prices on food and other goods transported by truck, ship and rail.
Prices are widely expected to keep rising as summer approaches. Gasoline futures jumped by nearly 6 cents to finish at a settlement record of $2.881. That is less than a nickel below the all-time intraday high for the benchmark contract that was set as Hurricane Katrina made landfall in 2005.
"Unfortunately, we do expect the price of gasoline, and probably diesel as well, are going to escalate as long as the price of oil keeps moving higher," said Geoff Sundstrom, a fuel price analyst for AAA.
Oil's recent run above $100 a barrel has been largely attributed to a steadily depreciating dollar, because the weakness prompts investors to seek a safe haven in hard commodities such as oil and gold. The greenback strengthened marginally against the euro Tuesday afternoon, but still remains near all-time lows against the 15-nation currency.
The oil report from the IEA _ the Paris-based energy watchdog for industrialized countries _ said Russia, the world's biggest oil exporter after Saudi Arabia, averaged 10 million barrels per day from January through March, down 1 percent from 2007. That is the first time production has failed to exceed previous-year figures since 1998.
Artyom Konchin, an analyst with Russian investment bank Aton Capital, attributed Russia's oil supply lull to high taxes and insufficient reinvestment into infrastructure.
"It's not that we don't have enough oil," he said. "We just don't have enough capital going into developing the fields."
Crude prices were also supported by reports of a number of supply disruptions.
Attracting the most attention was the closure of Mexico's three main oil-exporting ports on the Gulf Coast because of bad weather starting Sunday. Only one of the ports remained closed Tuesday, according to Mexico's Communications and Transportation Department.
The department issued a bulletin Tuesday morning that the Pacific oil port of Salina Cruz also had been closed because of strong wind and high waves, although that terminal is not a major supplier for the U.S.
"It just shows you how fragile the oil markets are," Sundstrom said.
In other Nymex trading, heating oil futures surged by 7.1 cents to settle at $3.2739 gallon, while natural gas futures spiked 15.2 cents to settle at $10.212 per 1,000 cubic feet.
In London, May Brent crude rose $1.47 to settle at $111.31 on the ICE Futures exchange.
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Associated Press Writers George Jahn in Vienna, Austria, Gillian Wong in Singapore, and Jessica Bernstein-Wax in Mexico City contributed to this report.
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ADAM SCHRECK | April 15, 2008 05:28 PM EST |
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