LONDON, 13 April 2006 — The price of Brent North Sea crude reached an all-time peak of $69.97 per barrel in yesterday trading on news of falling US gasoline stockpiles, combined with heightened tensions over Iran. Yesterday, the price of Brent crude for May delivery was 24 cents up at $69.55 per barrel in electronic deals.
New York’s main contract, light sweet crude for delivery in May, rose 12 cents to $69.10 per barrel in pit trading.
The US Department of Energy, meanwhile, revealed yesterday that gasoline or petrol inventories slumped by 3.9 million barrels to 207.9 million in the week to April 7. That contrasted with market expectations of a fall of just 2.1 million barrels. “This week, it’s a gasoline story,” said Societe Generale analyst Deborah White.
Market watchers said the figures reinforced concerns about gasoline constraints heading into the peak-demand US summer holiday season, beginning late May, when many American drivers take to the roads on vacation.
Gasoline stockpiles in the United States have been in decline for more than one month. Many US refineries are struggling to convert enough crude into gasoline to meet demand, White said, and this “feeds into the bullish sentiment”.
The DoE added that crude stocks rose by 3.2 million barrels to 346 million barrels. That was 7.8-percent higher than at the same stage last year and marked their highest point in almost eight years. Distillates, including diesel and heating fuel, fell 4.2 million barrels. Traders remained on tenterhooks over the latest developments in Iran, which is the world’s fourth-biggest producer of oil.
New York crude had hit an all-time high point of $70.85 a barrel on Aug. 30, 2005 after Hurricane Katrina hammered oil production facilities in the Gulf of Mexico region in the southern United States.
Oil prices surged by 40.0 percent last year on supply disruptions and strong demand for crude, especially from China which is experiencing an economic boom.
They fell at the start of 2006, as mild weather in the northern hemisphere reduced demand for heating fuel.
