Link

04/27 05:24

Gasoline Breaks Gulf War Record as Supply Concerns Mount

By Thomas Tugendhat

London, April 27 (Bloomberg) -- Gasoline broke its Gulf War record, reaching the highest price yet for the 17-year-old contract, on the New York Mercantile Exchange on increasing concern of potential U.S. shortages during the coming summer.

Refinery outages at Tosco Corp., Conoco Inc. and Royal Dutch/Shell Group in the U.S. and U.K. in the last two weeks come at a time when U.S. fuel reserves are 2 percent lower than last year, when pump prices jumped to a record above $2 in some areas. Those prices have returned even before the travel season begins.

``It's a similar to last year,'' said Mark Keenan, a broker with Prudential Bache in London. ``It's a very tight market.''

Gasoline for May delivery in the U.S. rose as much as 0.93 cent, or 0.8 percent, to $1.1135 a gallon in electronic trading on the New York Mercantile Exchange, a rise of 42 percent this year. The May contract expires Monday.

That rise pushed European prices higher, with a benchmark barge of gasoline this week rising to $342 a ton for immediate delivery. European refiners are shipping fuel across the Atlantic, where the world's biggest energy-consuming nation is paying a 25 cent-a-gallon premium for gasoline, more than double the average during the past year.

The U.S. is ``expecting a large influx of imports in the next few weeks,'' said Keenan. ``So the situation shouldn't last much longer.''

Analysts said crude oil also rose after Rilwanu Lukman, Nigeria's envoy to the Organization of Petroleum Exporting Countries, said he saw no reason for OPEC to ``rock the boat'' at its June meeting, raising concern among analysts that the 11- nation group will act too late to lower prices.

Brent crude oil for June settlement rose as much as 23 cents, or 0.8 percent, to $27.83 a barrel on the International Petroleum Exchange in London, after yesterday's 2.9 percent rise. Brent has risen 16 percent this year.

In the U.S., crude oil for June delivery rose as much as 6 cents, or 0.2 percent, to $28.50 a barrel in electronic trading on the Nymex.

-- (in@energy.news), April 27, 2001