- The Washington Times - Tuesday, May 8, 2007

NEW YORK (AP) — Crude oil and gasoline prices climbed yesterday after the U.S. government, citing ongoing problems at the nation’s refineries, said U.S. drivers probably will be paying more to fill their tanks this summer than previously forecast.

Bombings at three major oil pipelines in Nigeria also heightened supply worries in the energy market and lifted prices.

Light, sweet crude-oil futures for June delivery rose 79 cents to settle at $62.26 a barrel on the New York Mercantile Exchange, and gasoline futures rose 1.49 cents to settle at $2.2045 a gallon.

The Energy Department yesterday raised its outlook for the summer’s average pump price by 14 cents to $2.95 a gallon, and said it projects prices, which are now above $3 a gallon, to rise above the $3 mark again in August. The report also predicted that continued growth in global oil demand would keep the oil markets tight.

The average U.S. price of gasoline yesterday was $3.036 a gallon, according to AAA — just about 2 cents short of the record high reached in September 2005 after Hurricane Katrina struck the Gulf Coast.

Gasoline futures, which have soared this year as refinery shutdowns depleted U.S. inventories to levels not seen since late 2005, increased yesterday even though traders expect the Energy Department to report today a rebound in gasoline inventories.

“Over the last week, there’s been a lot of talk about refineries getting back on track and a potential increase in stockpiles [today] … but I think near the end of the day [yesterday], investors came to the realization that even if we have a slight uptick in gasoline stocks [today], we have a bullish outlook [for higher prices],” said James Cordier, president of Liberty Trading Group in Tampa, Fla.

An increase in gasoline stocks would be the first in 13 consecutive weeks. Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline supplies. There have been at least a dozen additional partial shutdowns in the United States and internationally that cut refining capacity.

Meanwhile, tens of thousands of barrels of crude oil have been knocked out in Nigeria just this week, keeping global supply fears alive.

“The cumulative production losses are mounting here,” said Citigroup Global Markets energy analyst Tim Evans.

Yesterday, the main militant group said in an e-mail: “Fighters of the Movement for the Emancipation of the Niger Delta attacked and destroyed three major pipelines … We will continue indefinitely with attacks on all pipelines, platforms and support vessels.”

Chief Joshua Benemesia, the head of a government-backed anti-piracy force, said he confirmed the attack with members of the Bayelsa State volunteers who were stationed in the two areas attacked, Brass and Akassa.

Italian oil company Eni SpA confirmed that two pipelines had been attacked. Eni’s subsidiary, Agip, operates the Brass export terminal, which exports 200,000 barrels of crude per day.

A bombing by the group, known as MEND, in December 2005 knocked out nearly a quarter of production in Africa’s largest oil exporter, which has still not been restored. The group has claimed responsibility for the kidnapping of six foreign oil workers last week.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide