Oil Prices Rise to New High Above $57 By THE ASSOCIATED PRESS
Published: April 1, 2005 Oil prices rallied to a record close above $57 a barrel Friday, sparked by a surge in gasoline futures that could send the average retail cost of gasoline above $2.25 a gallon within a few weeks. Another factor appeared to be an investment bank report that said strong demand and tight supplies could cause a ``super spike'' that will push oil prices above $100 a barrel. After climbing as high as $57.70 a barrel, a new intraday high, light, sweet crude for May delivery settled at $57.27 a barrel on the New York Mercantile Exchange, an increase of $1.87. Oil prices are now 67 percent higher than a year ago, but still well below the inflation-adjusted high above $90 a barrel set in 1980. Oil analyst Marshall Steeves of Refco Group Inc. in New York said the rally in fuel prices is ``overdone.'' ``I don't think the sky's the limit,'' Steeves said. ``At some point, there'll be some impact on demand. But where that price is, is hard to determine.'' Several analysts have been critical of an extremely bullish report that Goldman Sachs distributed to the media on Thursday, saying it created unreasonable fear in the market. The report said that oil prices could go as high as $105 a barrel -- the price Goldman Sachs said may be necessary to significantly curb energy consumption. Goldman Sachs analyst Arjun Murti said factors contributing to the run-up in prices include geopolitical turmoil in oil-producing countries. ``Oil markets may have entered the early stages of what we have referred to as a 'super spike' period -- a multiyear trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return,'' the report said. Other analysts said they would expect a slowdown in demand well before that point, and that oil producing nations already have plenty of economic incentive to add more supply to the market. Oil analyst Victor Shum of Texas-based Purvin & Gertz in Singapore said the chances of crude oil reaching $105 a barrel were slim. ********************* ``It will take a confluence of many events to happen,'' he said. ``For example, if oil reserves in Saudi Arabia were significantly destroyed, then we could see a spike.'' *********************** In other Nymex trading, heating oil futures climbed 4.77 cents to settle at a record $1.6638 per gallon, while natural gas futures rose 9.6 cents to $7.749 per 1,000 cubic feet. ------ Associated Press Writer Wee Sui Lee in Singapore contributed to this report. To subscribe, send a message to: [EMAIL PROTECTED] Or go to: http://groups.yahoo.com/group/FairfieldLife/ and click 'Join This Group!' Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/FairfieldLife/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
