Sam Fletcher
Senior Writer
HOUSTON, May 18 -- Crude and gasoline futures prices made modest gains to new record highs Monday, pushed up by speculation among investment funds and escalating violence in Iraq where the president of the Iraqi Governing Council was assassinated by a car bomb.
Meanwhile, the International Energy Agency, Paris, recently revised its estimate of 2004 world demand for oil upward by 330,000 b/d to 80.6 million b/d, a total increase of almost 1.8 million b/d from 2003. "First quarter demand growth in China is now seen at almost 1 million b/d," said IEA in its May report.
World oil production declined by 440,000 b/d to 81.5 million b/d in April, with supplies from the Organization of Petroleum Exporting Countries down by 415,000 b/d in that period, IEA said. Crude supplies from the 10 fully active OPEC countries, minus Iraq, declined by 380,000 b/d to 25.4 million b/d, up from the group's total current quota of 23.5 million b/d. Export disruptions caused Iraq's production to dip to 2.34 million b/d during April, said IEA.
In other action, Algerian Energy and Mines Minister Chakib Khelil reiterated his claim that a boost in OPEC's official production quota to 25 million b/d would do little to reduce world oil prices. He blamed geopolitical problems, market speculation, and the "rigidity" of the US oil market, along with the US system of refining and distributing petroleum products.
PurnomoYusgiantoro, OPEC's conference president, said Monday that group will ask the US government to take action to boost US gasoline supplies as a means of reducing pump prices.
However, Saudi Arabian Oil Minister Ali Naimi, who previously suggested increasing OPEC's quota by 1.5 million b/d, said Monday his country alone has the capacity to release 2.5 million b/d of additional crude into the world market. Saudi Arabia has that much spare production capacity "ready at a day's call," he told Dow Jones Newswires.
Energy prices
The June contract for benchmark US sweet, light crudes rose by 17¢ to a record $41.55/bbl Monday on the New York Mercantile Exchange, while the July contract gained 18¢ to $41.48/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., advanced by 15¢ to $41.53/bbl.
Gasoline for June delivery increased by 0.69¢ to a new high of $1.417/gal Monday on NYMEX. Heating oil for the same month was up by 0.19¢ to $1.0428/gal. The June natural gas contract advanced by 2.3¢ to $6.42/Mcf Monday, "as a fairly stable cash [natural gas spot] market and a recovering crude oil market offset early technical selling and profit taking in highly choppy trading," said analysts Tuesday at Enerfax Daily.
In London, the June contract for North Sea Brent crude moved up by 5¢ to $37.91/bbl on the International Petroleum Exchange. However, gas oil for the same month lost $3.25 to $324.50/tonne. The June natural gas contract dipped by 0.72¢ to the equivalent of $3.77/Mcf Monday on IPE.
The average price for OPEC's basket of seven benchmark crudes increased by 5¢ to $37.72/bbl Monday.
Contact Sam Fletcher at [email protected]