HOUSTON, June 27 -- Crude futures prices climbed toward a 3-week high June 26 on the New York market amid concerns over tight gasoline supplies approaching the Fourth of July holiday in the US.
An oil spill has restricted traffic along the Calcasieu Ship Channel and curtailed production at four refineries near Lake Charles, La. Production was reduced at ConocoPhillips's 425,000 b/d Lake Charles refinery, Citgo Petroleum Corp.'s 450,000 b/d facility, and Calcasieu Refining Co.'s 85,000 b/d unit. Pelican Refining Co.'s 15,000 b/d refinery shut down because the oil spill blocked its incoming supply. The US Coast Guard said the channel is expected to reopen by the end of this week.
Meanwhile, traders are speculating that the US Energy Information Administration's weekly report scheduled for June 28 release will show only a small build in US gasoline inventories. "Refineries are trying to ramp up gasoline production to meet seasonal summer demand, while gasoline inventories are expected to build at their lowest rate in 2 months," said analysts in the Houston office of Raymond James & Associates Inc.
The August contract for benchmark US sweet, light crudes gained 93¢ to $71.80/bbl June 26 on the New York Mercantile Exchange. The September contract increased by 97¢ to $72.74/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., jumped by $1.26 to $71.80/bbl. Gasoline for July delivery led the market, up by 5.12¢ to $2.18/gal on NYMEX. Heating oil for the same month gained 1.63¢ to $1.98/gal. However, the July natural gas contract dropped 25.7¢ to $5.97/MMbtu on NYMEX.
In London, the August IPE contract for North Sea Brent crude increased by 80¢ to $70.73/bbl. Gas oil for July lost $3 to $624.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes rose 19¢ to $64.59/bbl on June 26.
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