[Excerpt: "The lack of refining capacities is ultimately the bottom line," Norrish added. ...Highlighting the refinery problems, analysts at the Sucden brokerage firm noted that US oil major ChevronTexaco was forced to shut the crude distillation unit at its 210,000-barrels per day Pembroke refinery in Wales last Friday...."The refinery is a major exporter of gasoline to the United States," they said.]
http://news.yahoo.com/news?tmpl=story&u=/afp/20050401/bs_afp/commoditiesenergyoil_050401231928 Fri, 01 Apr 05 Oil hits new highs as market frets over refining capacity New York's main contract, light sweet crude for delivery in May, jumped to an all-time closing high of 57.25 dollars a barrel, up 1.87 from Thursday's close. Prices hit an all-time intraday high of 57.70 dollars in afternoon trade on the New York Mercantile Exchange. London's Brent North Sea crude oil for delivery in May surged 2.22 dollars to a new record high of 56.51 dollars a barrel, topping the March 17 record of 56.15 dollars. Oil prices, underpinned in recent days by worries about a lack of US refining capacity and a Goldman Sachs study that forecast crude could top 100 dollars per barrel, got a further lift from news of a shutdown at Venezuela's Paraguana refinery, the largest in the world, due to electrical problems. "The market is particularly sensitive to supply disruptions," said Marshall Steeves, analyst at Refco. But he added that the rally is also being pumped up by "very strong speculation" that amplifies price movements. A jump in gasoline prices, which hit a record 1.731 dollars a gallon in futures trading, also put pressure on the overall market. "The market is being pushed up by very, very strong (refined) product markets," Barclays Capital analyst Kevin Norrish said. "There are real concerns about product availability, that's what is underpinning the strength of the market at the moment." Despite the fact that the United States has rising levels of crude stockpiles, there are fears that refineries will be unable to turn it into gasoline quickly enough ahead of the country's so-called "summer driving season" that begins next month. "The lack of refining capacities is ultimately the bottom line," Norrish added. Highlighting the refinery problems, analysts at the Sucden brokerage firm noted that US oil major ChevronTexaco was forced to shut the crude distillation unit at its 210,000-barrels per day Pembroke refinery in Wales last Friday. "The refinery is a major exporter of gasoline to the United States," they said. Jason Schenker at Wachovia Securities said the high profits in gasoline bring in speculators who can cash in from buying crude oil. But he said another factor was the Goldman Sachs report on Thursday, which raised the possibility of a "superspike" in crude oil to as high as 105 dollars a barrel. Schenker dismissed the projection as unlikely, saying, "It is possible to reach 105 dollars a barrel, but in my opinion it would take a cataclysmic terrorism attack on infrastructure to get there. I don't think we will trend up to 105." As a result, Schenker said, the rally could be vulnerable to a correction. "If this rally is driven by a published article (from Goldman Sachs) and some irrational exuberance we might anticipation some downside next week," he said. Oil prices were being supported also by supply worries ahead of a likely strike by energy workers in Nigeria, Africa's biggest exporter of crude. Nigerian oil unions said Wednesday that it would take a miracle to avert a nationwide strike as talks with government and energy majors on working conditions broke down. A three-day "warning strike" was due to begin April 11. World oil prices have now more than doubled since early 2002. Adjusted for inflation, however, they remain far below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of 80 dollars a barrel in today's money. enditem ------------------------ Yahoo! Groups Sponsor --------------------~--> Give underprivileged students the materials they need to learn. 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