Oil Climbs to New Record of More Than $144 a Barrel

By Tom Incantalupo, Newsday, Melville, N.Y.

Jul. 3–Crude oil climbed to yet another record, more than $144 a barrel yesterday, dashing hopes that the recent slowdown in gasoline price increases would last.

At pumps locally, gasoline jumped by a fraction of a cent yesterday, the AAA said, also setting a record, at an average of $4.33 a gallon for regular. That is almost $1.14 a gallon higher than a year earlier.

Petroleum consultant Peter Beutel of Connecticut-based Cameron-Hanover Inc., said oil seems likely to reach at least $150 a barrel in the near future, portending a new round of steep increases at the gas pump.

“I expect we’re going to start to see prices doing their seven-cent-[increase] a-week thing like they were doing,” he said.

Meanwhile, the state reported that heating oil averaged a near-record $4.845 a gallon on Long Island as of Monday, more than $2 above the average a year earlier, virtually assuring that the winter will be as financially painful for homeowners as the summer is shaping up to be for motorists. The increases are forcing some local small businesses to make drastic changes to adapt to higher fuel costs.

Energy analysts blamed yesterday’s rise in crude oil to $144.15 a barrel during intraday trading on word from the U.S. Department of Energy that U.S. crude oil supplies fell more than expected, by 2 million barrels in the past week to 299.8 million barrels.

Also feeding the bullish mood was a still further weakening of the U.S. dollar against the euro. A weaker dollar makes oil cheaper for investors dealing in other currencies, such as the euro, and also encourages investors to buy commodities such as oil as a hedge against inflation.

Also contributing to yesterday’s oil price hike is the concern that growing demand for petroleum by developing nations is outstripping the world’s ability to increase supplies. That contention is a subject of intense debate among experts.

The new crude oil record came in electronic trading after the close of floor trading on the New York Mercantile Exchange.

Soaring gasoline prices have led American drivers to cut back somewhat on trips, but the latest weekly report from MasterCard’s SpendingPulse unit found gasoline purchases last week only about 2.1 percent below those of a year earlier.

Although lower than last year, consumption increased each week in June above the week before, to 66.8 million barrels last week, apparently as warmer weather encouraged more leisure trips.

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