By Mark Shenk
Bloomberg News
Friday, May 11, 2007
NEW YORK: Crude oil and gasoline prices rose Thursday on concern that U.S. motor-fuel inventories were not sufficient to meet demand during the summer driving season.
Inventories of gasoline rose by 372,000 barrels in the week ended May 4, the first gain in 13 weeks, but supplies were still down 8 percent from the five-year average for the date, the Energy Department said Wednesday.
“It’s only a few weeks before driving season, and gasoline supplies are more than 15 million barrels below normal,” said Phil Flynn of Alaron Trading in Chicago. “A gain of under 400,000 barrels isn’t a lot.”
Crude oil for June delivery rose 26 cents to $61.81 a barrel on the New York Mercantile Exchange. Gasoline for June delivery in New York jumped 9.52 cents to $2.326 a gallon.
“It looks like gasoline demand will be pretty strong,” said Peter Meyer, a commodity trader for Lehman Brothers Holdings. “Seeing $3 at the pump is no longer enough to curtail demand. We now have to see $4 before people change their behavior.”
The Italian oil and power company Eni cut output at its Brass crude oil export terminal in Nigeria by 98,000 barrels a day after a militant group attacked pipelines this week.
The Movement for the Emancipation of the Niger Delta, a militant group, took credit for the attack that disrupted the flow of oil to the Brass terminal. The group has attacked refineries, pipelines and other facilities in the delta for more than a year in a campaign to cripple the Nigerian oil industry.
The raids have forced Royal Dutch Shell’s unit in Nigeria to halt output of about 500,000 barrels a day.
Gold and silver prices fell for the third straight session as the euro’s rally against the dollar stalled, reducing the appeal of the metals as alternative investments. The euro has fallen against the dollar for three straight sessions.
Gold futures for June delivery fell $15.50 to $667 an ounce on the Comex division of the New York Mercantile Exchange. Silver for July delivery dropped 33 cents to $13.14 an ounce.
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