Gasoline futures soared to a near-record high of $1.0652/gal on the New York Mercantile Exchange Tuesday, up 6.28�/gal amid fears of possible shortages at the start of the peak US driving season. The all-time high for unleaded gasoline futures was $1.11/gal in August 1990, officials said.
There may not be enough reformulated gasoline available to supply major US cities that are under mandates by the Environmental Protection Agency to reduce air pollution, officials said.
Expiration of the June contract for gasoline following Tuesday's session added to its price volatility, which prompted two US senators to ask Energy Sec. Bill Richardson to release oil from the Strategic Petroleum Reserve to push down prices (see story in today's Top Stories section).
The July contract for light, sweet NYMEX crude climbed 35� to $30.35/bbl Tuesday, while the August contract was up 34� to $29.41/bbl. In after-hours electronic trading, the July contract eased slightly to $30.33/bbl, while the August contract improved to $29.50/bbl.
Home heating oil also edged up 0.09� to 76.48�/gal Tuesday. NYMEX natural gas for July delivery continued to climb, up 8.6� to an impressive $4.36/Mcf.
Following the close of business Tuesday, NYMEX raised the margins on its Henry Hub gas futures contracts to $3,500 from $2,500 for clearing members; $3,850 from $2,750 for other members; and to $4,725 from $3,375 for customers.
Meanwhile in London, the July contract for North Sea Brent oil settled at $28.96/bbl, down 26� for the day, in a wave of profit-taking after the recent price rally on the International Petroleum Exchange (IPE). But the market was rallying, with North Sea Brent trading at $29.35/bbl in another bull run early Wednesday.
The average price of OPEC's basket of seven crudes increased 16� to $28.46/bbl Tuesday.
IPE's July contract for natural gas also gained 16� to the equivalent of $3.88/Mcf.
On the Singapore Exchange, North Sea Brent dipped 22� to $29/bbl Wednesday, as the Asian Oil & Gas Conference in Kuala Lumpur set a softer tone for that market.
Delegates to that 2-day conference, which ended Tuesday, observed that Asian demand for petroleum products has not been as good as expected. With crude prices in the $29/bbl range, they said, petroleum products were no longer affordable in poor importing markets.
They agreed that prices should be brought to a more manageable level in a "win-win" arrangement for both producers and consumers. Conference sources suggested the possibility of a future meeting of producers and consumers to discuss prices.