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The New York Times: Oil Rises Past $75 on Mideast, Refinery Woes

EXTRACT: Hiccups at several U.S. plants, forecasts for a tropical disturbance to form in the Gulf of Mexico in the next few days and news that Royal Dutch Shell (RDSa.L) had been forced to trim more output at its Nigerian Bonny oilfields added to the unease.   

THE ARTICLE
 
By REUTERS
Published: July 25, 2006
Filed at 0:53 a.m. ET

SINGAPORE (Reuters) – Oil pushed higher above $75 a barrel on Tuesday as dealers saw little hope for a quick end to the conflict in Lebanon and refinery outages threatened to tighten fuel supplies in the midst of the summer driving season.

U.S. crude for September (CLc1) rose 21 cents to $75.26 a barrel by 0354 GMT, climbing for a third day, while London Brent crude (LCOc1) gained 21 cents to $74.82.

U.S. Secretary of State Condoleezza Rice holds talks with Israeli Prime Minister Ehud Olmert on Tuesday, one day after meeting Lebanese leaders in an effort to end a two-week war between Israel and Hizbollah guerrillas that oil traders fear might destabilize exports from major regional producers.

But she offered little hope for an immediate end to the conflict, and a White House spokesman said any immediate ceasefire would be “unenforceable.”

“(Geopolitics) certainly help put a floor in the market,” said John Brady, a New York broker at ABN AMRO. “With the gasoline and hurricane seasons as well, there’s a lot of wind at the back of the bulls.”

Oil hit a record-high of $78.40 earlier in July on fears the fighting could spread to other parts of the Middle East, which produces about a third of the world’s oil.

Gains gathered pace after traders said a crude distillation unit at Venezuela’s Amuay refinery — part of the world’s biggest refining complex and a top supplier of U.S. gasoline imports — will be shut for five to seven months following a fire last week.

Hiccups at several U.S. plants, forecasts for a tropical disturbance to form in the Gulf of Mexico in the next few days and news that Royal Dutch Shell (RDSa.L) had been forced to trim more output at its Nigerian Bonny oilfields added to the unease.

U.S. gasoline inventories were expected to have slipped by 400,000 barrels last week, while crude stocks were seen dipping 100,000 barrels, a preliminary Reuters poll found.Gasoline futures (HUc1) climbed 0.5 percent, or 1.18 cents, to $2.3260 a gallon on Tuesday.

Oil prices have risen about 23 percent this year and nearly quadrupled since early 2002, but some who have profited from the rally are now questioning how far it still has to run.

Legendary trader and long-time oil bull Boone Pickens, estimated to have made $1.5 billion last year at his BP Capital LLC hedge fund, said he expected crude to top $80 a barrel this year, but was less confident on seeing a triple-digit price.

“If I went to sleep this afternoon and woke up January 1 and you told me oil was $100 a barrel I wouldn’t be surprised. Would I bet on it? No,” Pickens told Reuters in a telephone interview.

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