NEW YORK, 8 April 2008 — Oil rose nearly $3 yesterday to past $109 a barrel as a fire at a European refinery stirred fresh fuel supply concerns.
Finnish refiner Neste Oil said repairs and maintenance on a diesel unit at its 200,000-barrel-per-day (bpd) Porvoo refinery would stretch through May following a fire on Friday.
The news pushed prices for London gas oil, a fuel closely related to diesel and heating oil, to a record $1,005 a ton and led US heating oil and crude prices sharply higher on the New York Mercantile Exchange, dealers said.
“It’s the gas oil situation in Europe that’s pushing up NYMEX heating oil,” said Tom Knight, a trader at Truman Arnold.
“Distillate prices there have shot up amid refinery maintenance and a fire at Neste’s Porvoo refinery in Finland.”
US crude jumped $2.89 to $109.12 a barrel by 1747 GMT after touching $109.48 earlier in the day. London Brent crude gained $2.27 to $107.17 a barrel.
Diesel is widely used in Europe as a motor fuel, and global demand for diesel is rising significantly more quickly than that for gasoline, analysts have said.
US Energy Secretary Sam Bodman said he hoped OPEC would ramp up production to help motorists as the world’s top consumer nears the summer driving seasons with prices near the all time high of $111.80 a barrel hit on March 17.
“I have repeatedly asked that there be an increase,” Bodman said. “They have so far chosen not to do it. I remain optimistic.”
