WASHINGTON, 9 August 2005 — Oil prices jumped to a new high near $64 a barrel yesterday, reflecting the market’s persistent uneasiness about strong demand, tight supplies and a slew of threats to output around the globe.
Traders pinned the latest rally on security concerns in Saudi Arabia, refinery snags in the United States and the continued rise of gasoline consumption in spite of soaring pump prices.
The average US price for regular unleaded gasoline is $2.34 a gallon, or 46 cents above last year, according to the Oil Price Information Service of Wall, New Jersey. Still, government data show that gasoline consumption is up almost 1 percent at 9.1 million barrels a day through July, compared with last year.
Oil analyst Marshall Steeves at New York-based brokerage Refco Group Inc. said oil and gasoline prices were likely to keep rising until there were signs of a significant dropoff in demand, or a sharp slowdown in economic growth. “We’re clearly not there yet,” he said.
Light, sweet crude for September delivery rose to a high of $63.99 a barrel on the New York Mercantile Exchange before falling back to close at $63.94.
Prices had settled at $62.31 a barrel on Friday, a record close for crude since Nymex trading began in 1983.
Several factors put the market on edge yesterday:
• The US Embassy and consulates in Saudi Arabia were closed after authorities announced Sunday a security threat against US government buildings inside the world’s largest petroleum-producing country.
• Iran, OPEC’s second biggest player behind Saudi Arabia, resumed uranium conversion activities at its Isfahan nuclear facility yesterday, a step that Europeans and the United States have warned would prompt them to seek UN sanctions against the Tehran regime.
• A fire broke out at a Sunoco Inc.’s refinery in Philadelphia over the weekend. This followed a string of refinery fires and other snags over the past two weeks that have not severely diminished supply, but have nonetheless made oil traders nervous.
