Crude rallies - up $1.54 in two daysgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
Thursday June 22, 3:46 pm Eastern Time
NYMEX crude rallies as tight supply seen persisting
NEW YORK, June 22 (Reuters) - NYMEX crude oil futures ended above $32 a barrel Thursday, extending a strong rally from Wednesday after traders cast doubts on whether OPEC's output increase could shore up tight supplies.
NYMEX August crude settled at $32.19, an 82-cent jump, bringing up gains in the past two days to $1.54.
In late trade the contract broke above Wednesday's high of $31.95 and surged to a fresh contract high of $32.35.
Gasoline futures extended gains, pushed partly by crude's strength and news of an outage at a gasoline making unit at Sunoco Inc.'s (NYSE:SUN - news) Point Breeze, Pa., refinery.
Support from the outage may be short-lived, however, as the company has said the unit may restart sometime later on Thursday.
Near the close, July gasoline posted an intraday high of $1.084 a gallon, gaining 4.49 cents on the day, before settling at $1.0813, up 4.22 cents. It traded as low as $1.0355.
Heating oil futures were bullish on crude's strength.
July heating oil hit a new contract high of 81.75 cents a gallon, advancing 3.17 cents, before finishing at 81.43 cents, up 2.85 cents.
In London, August Brent crude on the International Petroleum Exchange (IPE) ended at $30.15, gaining 82 cents on the day.
Oil traders say that OPEC's production increase may not be enough to ease the current supply tightness as the cartel is already producing 500,000 bpd over its quotas set in March.
Traders argue about 1.0 million bpd is needed to bring down high prices.
OPEC President Ali Rodriguez defended the cartel's cautious approach on Thursday, saying the decision for a modest increase was influenced by concern for the seasonal demand dip in the second quarter 2001.
``The projections we are using indicate the demand growth may not be as strong as we thought at the beginning of the year and we have to take care with the situation next year because once again there will be a period of low demand,'' Rodriguez said.
U.S. Energy Secretary Bill Richardson said he is unsure if OPEC's output increase would help lower U.S. gasoline prices.
He made the statement as the federal government began its investigation into the recent spike in Midwest gasoline prices.
But as the probe shifts into high gear, wholesale gasoline prices in the region dropped dramatically, by five cents a gallon on Thursday, extending the slide since Monday to 40 cents.
-- Cave Man (firstname.lastname@example.org), June 22, 2000
Gradually the market will perceive that there is neither an OPEC ceiling nor a roof above it. Prices will soar into the $40s. That in turn will trigger a stockmarket crash and another Asian recession. By year end, all of this may have curbed demand sufficiently to allow oil prices to fall back to the mid $30s. In any event, the days of cheap oil are well and truly over
Except from 'Oil Price and Depletion' by Colin Campbell
-- Cave Man (email@example.com), June 22, 2000.
Horse Shit Cubed. SAME OLD .........SAME OLD.
Typical Doomer "generalizations".
Refer to Y2k Computer End of the World because of the terrible problem 1997-post 1/1/2000.
-- cpr (firstname.lastname@example.org), June 22, 2000.
I feel much better now, knowing that the $1.63/gallon I paid today was just a figment of my imagination.
-- I'm Here, I'm There (I'm Everywhere@so.beware), June 23, 2000.
Yea, the $1.83 that I just paid for Regular doesn't hurt so much, knowing that CPR is in charge.
-- Gasoholic (Gasman@cpr.knows.best), June 23, 2000.
It is not in the best interest of OPEC to tank the world ecomomy, lower prices plus less sales, also they have investments world wide.
OPEC just might be tapped out. They can talk the talk but can't walk the walk.
-- Cave Man (email@example.com), June 23, 2000.