By OGJ editors
HOUSTON, May 9 -- US crude prices continued to climb last week due to concerns that refiners will be unable to meet rising product demand in the second half of this year.
"This view was bolstered late in the week by better-than-anticipated US employment data, which indicated a strengthening US economy and thus was bullish for demand," said Robert S. Morris, Banc of America Securities, New York.
Production problems in Venezuela, the world's fifth largest oil exporter, added to the market's bullish sentiment, analysts said
The June contract for benchmark US light, sweet crudes touched above $52/bbl before settling at $50.96/bbl, up by 13¢ for the May 6 session on the New York Mercantile Exchange. The July contract increased by 18¢ to $52.67/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., gained 13¢ to $50.97/bbl. Spot market prices for WTI bounced back from a 2-month low early in the week after declining by 8.6% the previous week, Morris reported.
However, heating oil for June delivery lost 1.26¢ to $1.43/gal on NYMEX. Gasoline for the same month dipped by 0.32¢ to $1.48/gal. The June natural gas contract fell by 7¢ to $6.62/MMbtu on NYMEX.
"Temperatures in New York and Chicago are expected to climb to above normal this week with highs reaching above 70°. While recent spring maintenance outages at many nuclear power plants and a more than $1[/MMbtu] premium for winter futures have increased buying in the cash market, falling power loads this week should limit further price gains," said analysts May 9 at Enerfax Daily.
In London, the June contract for North Sea Brent crude lost 36¢ to $51.13/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes gained 29¢ to $47.92/bbl on May 6. So far this year, the OPEC basket price has averaged $45.51/bbl, up from an average $36.05/bbl for all of 2004.
