LONDON, July 4: World oil prices rose in London on Monday, after making huge gains the previous Friday on expectations of a big rise in petrol, or gasoline, consumption during the long US holiday weekend. The price of Brent North Sea crude oil for delivery in August gained 36 cents to $57.90 per barrel after finishing $1.96 higher on Friday.
New York’s main contract, light sweet crude for delivery in August, was not being traded Monday owing to the Independence Day holiday. It had surged $2.25 to close at $58.75 per barrel on Friday.
A week ago New York futures struck $60.95 — the highest level since it was first traded in 1983 — on concerns of a possible global supply shortage of distillates, including heating fuel, during the fourth quarter.
“Distillate remains the key product driver with US distillate demand holding at high levels and growing concern over availability later this year,” Barclays Capital analyst Kevin Norrish said on Monday.
Brent crude hit a new record level of $59.59 also on June 27, meaning prices had leapt by about 45 per cent since the start of the year.
However, prices had slumped by more than $4 per barrel after last Wednesday’s unexpected rise in US crude inventories.
With prices below record peaks, the Organization of Petroleum Exporting Countries decided last Thursday to suspended talks on a fresh rise in its crude production quota.
“This backs up the feeling that Opec is happy with the high prices,” analysts at the Sucden brokerage firm said.
“However this is not to say that it is Opec pushing prices higher. The reason remains the high demand and the lack of spare refining capacity,” they added.
Analysts have blamed voracious energy demand by the United States and China as a key reason behind recent sky-high oil prices.
The countries’ combined crude demand for 2005 is forecast at 28 million barrels per day, equivalent to a third of the 84.3 mbpd expected to be consumed by all nations during the period, the International Energy Agency said recently.
Elsewhere, China responded angrily on Monday to a vote by US lawmakers urging US President George W. Bush to block the $18.5 billion takeover bid by China National Offshore Oil Corporation for US oil group Unocal.
“We demand that the US Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries,” China’s foreign ministry said in a statement.
The House of Representatives last Thursday voted 398-15 for the non-binding resolution that calls on the US government to block the Unocal bid.—AFP