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Crude Oil Futures Rise Above $145 Amid Signs Fuel Supplies May Be StrainedJuly 3rd, 2008Crude oil futures rose above $145 a barrel to a record amid signs global demand for fuels, particularly from China, may strain supplies. PetroChina Co. may import record volumes of petroleum products this year to meet demand needed for reconstruction after an earthquake, China National Petroleum Corp. said June 28, and to prepare for the Olympics. Heating oil futures, a proxy for distillate fuels including diesel, rose to a record today. ``There's a kind of expectation in the market that there will be strong ongoing demand for distillate fuel,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``We had the Chinese earthquake, and we've got the Olympics coming up.'' Crude oil for August delivery rose $1.72, or 1.2 percent, to settle at $145.29 a barrel at 2:55 p.m. on the New York Mercantile Exchange. Futures earlier touched $145.85, the highest since trading began in 1983. U.S. financial markets are closed tomorrow for the Independence Day holiday. The May 12 earthquake in China's Sichuan Province, the country's biggest in 58 years, killed more than 69,000 people. The Olympic Games will be held Aug. 8-24 in Beijing. Heating oil for August delivery rose 3.45 cents, or 0.9 percent, to $4.106 a gallon on the exchange. Earlier, the fuel climbed 6.35 cents, or 1.6 percent, to a record $4.135 a gallon. Job CutsConcern that economic growth may be slowing dampened crude oil's gain earlier.U.S. employers cut jobs for a sixth straight month and service industries shrank in June, signaling that the slowdown may deepen as the impact of federal tax rebates fades. ``You've got the economic reality that the U.S. economy stinks, demand for oil stinks,'' said David Pursell, managing partner at Tudor Pickering Hold Co. in Houston. The euro fell the most against the dollar in more than three weeks after European Central Bank President Jean-Claude Trichet indicated he may not boost interest rates again. The ECB raised its benchmark lending rate to 4.25 percent today. Trichet said at a press conference in Frankfurt that he has ``no bias'' on further moves. The euro dropped 1.2 percent to $1.5695 at 3:22 p.m. in New York, from $1.5882 yesterday. Declines in the dollar were one of the factors responsible for a 48 percent increase in oil futures prices in the first half of the year. Stock MarketsEarlier today, oil reached a record amid buying from investors seeking an alternative to tumbling stock markets and amid concern a conflict with Iran over its nuclear program would cut Persian Gulf supplies.Ali Akbar Velayati, adviser to Iran's supreme leader, said his comments earlier this week that Iran must consider talks over its nuclear program didn't mean his country would accept Western incentives to abandon uranium enrichment, Agence France-Presse said. Iran is OPEC's second-largest oil producer. Nearly all of oil's ``last $10 move is based on the potential for an Israeli-Iranian conflict,'' said Andy Lipow, president of Lipow Oil Associates LLC, a consulting company based in Houston. Oil prices are being led higher by factors including geopolitics, the weakening dollar and concern about future supplies, Saudi Arabia's Oil Minister Ali al-Naimi said in Madrid today, where he is attending the World Petroleum Congress. Brent crude oil for August settlement rose $1.82, or 1.3 percent, to $146.08 a barrel on London's ICE Futures Europe exchange. Futures earlier climbed to $146.69, the highest intraday price since trading began in 1988. Tropical Storm Bertha, the second named storm of the Atlantic hurricane season, formed today in the far eastern Atlantic Ocean, near the Cape Verde Islands, according to the U.S. National Hurricane Center. The storm, with maximum sustained winds of near 40 miles (65 kilometers) an hour, was moving to the west-northwest at about 14 mph. - Margot Habiby in Dallas and Robert Tuttle in New York at Bloomberg. Click here for your Free Crude Oil Gas Futures Trading eGuide | |