Crude oil rose in New York after a refinery fire and the threat of a production strike in Belgium.
These threats pushed gasoline futures higher for an eighth day. Gasoline reached an eight-month high of $2.32 a gallon on April 26 after a fire at Marathon Oil Corp.'s Garryville, unit (US - Louisiana) and Belgian workers voted to strike at four refineries in Antwerp next month. Average US utilization rate would come back to 97% compared to present 87.8% as for thew beginning of the summer but the market is suspicious of a recovery, according to yesterday report of the US Energy department.
This along with the Belgian workers union makes the market situation unstable. Crude oil NYMEX rose 0.6% to $65.44 a barrel and it was at $65.34 at 2 p.m. in Singapore. „We need to make 2.5 million barrels a week or we're in big trouble” when gasoline demand picks up next month, said Chris Mennis, owner of oil broker New Wave Energy LLC in Aptos, California. „But I doubt it's going to happen.”
„The fact is that even current extraordinary profitability in the refining sector cannot stop the above-normal stock draw,” said Makota Takeda, energy analyst at Bansei Securities Co. in Tokyo in an e-mail.
Gasoline may plunge once refiners increase output, and investors should avoid trading either gasoline or oil if they can avoid it, New Wave's Mennis said. Nigeria is seeking an increase in its OPEC production quota by 690,000 barrels to 2.75 million barrels a day, Dow Jones Newswires reported yesterday, citing a Nigerian National Petroleum Co. official. Royal Dutch Shell Plc will restore production in the country's western delta by the end of May, Energy Minister Edmund Daukoru said April 18. Iran is the second-biggest producer in the OPEC and almost a 25% of the world's oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf. (bloomberg.com)