WASHINGTON - Oil prices jumped to a new high near $64 a barrel Monday, reflecting the market's persistent uneasiness about strong demand, tight supplies and a slew of threats to output around the globe.
Traders pinned the latest rally on security concerns in Saudi Arabia, refinery snags in the United States and the continued rise of gasoline consumption.
Oil analyst Marshall Steeves at New York-based brokerage Refco Group Inc. said oil and gasoline prices were likely to keep rising until there were signs of a significant dropoff in demand, or a sharp slowdown in economic growth.
"We're clearly not there yet," he said.
Light, sweet crude for September delivery rose as high as $63.99 a barrel on the New York Mercantile Exchange. The contract settled $1.63 higher at $63.94 - the peak close since Nymex trading began in 1983.
"The market clearly has the jitters," said Deborah White, an energy analyst at SG Securities in Paris.
Broadly speaking, those jitters are tied to worldwide consumption, which is expected to average more than 84 million barrels a day in 2005, leaving only about 1.5 million barrels a day of spare production capacity that could be called upon in an emergency.
Given such a slim margin for error in the supply chain, a large premium has been priced into every barrel sold on futures markets.
Several factors put the market on edge:
- The U.S. Embassy and consulates in Saudi Arabia were closed after authorities announced Sunday a security threat against U.S. government buildings.
- Iran resumed uranium conversion activities at its Isfahan nuclear facility Monday.
- A fire broke out at a Sunoco Inc.'s refinery in Philadelphia over the weekend.
- Suspected rebels launched renewed attacks overnight on pipelines in eastern India.
Oil broker Tom Bentz, of New York-based BNP Paribas Commodity Futures, said there was no single event on which Monday's rally could be attributed.
"We've just got a continuation of the uptrend here," he said. "And there's no sign that it will be stopping anytime soon."
Rising rates
According to the Oil Price Information Service of Wall, N.J., for regular unleaded gasoline:
Average nationwide price: $2.34 a gallon
Increase: 46 cents above last year
Gasoline consumption: Up almost 1 percent at 9.1 million barrels a day through July, compared with last year.
- Associated Press
Up and up
For regular unleaded gasoline:
Average nationwide price: $2.34 a gallon, which is an increase of 46 cents above one year ago, according to the Oil Price Information Service of Wall, N.J.
Gasoline consumption: Despite the price, government data show that consumption is up almost 1 percent at 9.1 million barrels a day through July, compared with last year.
- Associated Press
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