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Posted at 2:37 p.m. PST Friday, November 19, 1999

Crude oil prices at nine-year high

BY DAVE CARPENTER AP Business Writer

The surge in crude oil prices continued Friday as futures reached $27 a barrel on the New York Mercantile Exchange for the first time since 1991.

After a more than $2-a-barrel gain in the past week, oil now appears increasingly poised for a move on $30 by year's end -- a level that, if sustained, likely will bring sharply higher prices for gasoline, airline tickets and shipped products.

Natural gas futures, meanwhile, fell to an eight-month low on forecasts for a mild winter in much of the United States.

In other markets, platinum fell sharply and pork bellies rose.

Oil rocketed higher in a late-session rally, hitting a high of $27, before settling at $26.56, up 76 cents for the day.

Comments from Mexico's oil minister suggesting concern about high prices put only a temporary damper on a market that remains bullish because of lowered OPEC production levels that are eating away at world supplies.

It was the last day of trading on the near-term contract, oil for December delivery. But analysts said the latest surge may have happened anyway in a buyers' market.

``It just closed very strong -- there's really no specific reason,'' said Bill O'Grady, energy analyst for A.G. Edwards & Sons in St. Louis.

``It's just more of the same,'' he said. ``Inventories are really tightening up, and a good chunk of this is tied to Y2K concerns. We just think prices are going to go up from here.''

December heating oil rose 1.54 cent to 68.05 cents a gallon, and December unleaded gasoline rose 1.78 cent to 73.15 cents a gallon.

December natural gas fell 6.2 cents to $2.434 per 1,000 cubic feet after the National Weather Service said warmer-than-usual weather is expected this winter from the southwestern United States to the Atlantic Coast and from southern New England to the southern tip of Florida. In addition, temperatures for the highest-demand U.S. regions -- the Northeast and the Midwest -- are expected to be above average this weekend.

In London, January Brent crude rose 71 cents cents to $25.07 on the International Petroleum Exchange.

Elsewhere at the New York Merc, platinum futures plunged to an 11-day low in fallout from news earlier in the week that the Russian Duma has approved an amendment to allow new exports of platinum group metals. A lack of Russian shipments this year has tightened world supplies and driven prices up.

January platinum fell $9.20 to $404.10 an ounce after tumbling as low as $400.

Frozen pork bellies rose the 3-cent limit on the Chicago Mercantile Exchange before slipping back later in the session after McDonald's defused rumors it is about to introduce sandwiches with bacon in them nationwide. Bacon is processed from pork bellies.

McDonald's, the world's biggest restaurant chain, has been testing its ``Make It Bacon'' promotion since May in 80 of its 13,000 U.S. stores. Under the promotion, customers can pay extra to add two or three strips of bacon to the sandwich of their choice.

Spokesman Brad Trask said from the company's Oak Brook, Ill., headquarters that there are no immediate plans to expand the promotion.

-- Homer Beanfang (Bats@inbellfry.com), November 19, 1999

Answers

A Supplement....

Gas Prices Soar in Metro Detroit

-- PJC (paulchri@msn.com), November 19, 1999.

It's still holding at $1.649 on Kaua'i (a nickle less on Saturdays) and $2.00 on Molokai (at the discount station). Time to fill up the spare cans...

-- Mad Monk (madmonk@hawaiian.net), November 19, 1999.

LOL! A "Make It Bacon" promotion, right before all our fat's about to go into the frier. Oh the irony is killing me.

-- Bokonon (bok0non@my-Deja.com), November 20, 1999.