Oil prices driven higher by record gasoline highs

Published May 1st, 2001 - 02:00 GMT

Oil prices spurted higher again on Monday, April 30, thrust higher by surging gasoline prices, which scaled new high points amid concerns of a shortage in the United States this summer. A barrel of Benchmark Brent North Sea crude for June delivery was selling for $28.23, from $27.79 at Friday's close. 


New York light sweet crude June futures added 48 cents to $28.75 in early deals Monday. Dealers and analysts said that a spike in gasoline prices was pushing up demand for crude, needed to boost gasoline production to satisfy the market's thirsts. 


"It's all gasoline," said Schroder Salomon Smith Barney analyst Peter Gignoux. "Anything that tweaks the American market is just inflammatory." On Monday, the price of a gallon of gasoline rocketed to a record high of $1.163 on the US electronic market, as continuing worries over low inventories troubled traders. Gasoline stocks are currently six percent lower than they were this time last year. 


"Everything is strong within the market," said a London-based trader with the ED and F Man brokerage. "Fund-buying coming in the market is very strong at the moment." Comments from US Energy Secretary Spencer Abraham suggesting that his talks with Saudi Oil Minister Ali Al-Nuaimi on Friday had been fruitful had little visible effect on the market. 


"We had a productive and wide-ranging discussion," Abraham said following the meeting, adding: "Saudi Arabia is a strong ally of the United States and a very important OPEC country." "Our meeting today was the first of what I expect will be many to discuss our areas of mutual interest," Abraham said. 


The Organization of Petroleum Exporting Countries (OPEC) has slashed output by 2.5 million barrels a day this year in its efforts to maintain a basket price of $25 a barrel. Consumer countries fear that the cutbacks will spark a repeat of last year's gasoline shortage as demand picks up going into the northern hemisphere summer. OPEC's basket price of seven crudes worldwide rose to $25.76 a barrel on Friday, from $25.69 on Thursday, the OPECNA agency reported. —(AFP)  


© Agence France Presse 2001 

© 2001 Mena Report (www.menareport.com)

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