Oil Prices Rise Above $60 a Barrel
By MADLEN READ
NEW YORK – Oil prices climbed above $60 a barrel Tuesday amid temporary trouble with an Alaskan pipeline and a couple of U.S. refinery outages.
Energy traders were also buying ahead of the weekly U.S. oil inventory report, which is released Wednesday. Analysts are expecting it to show that U.S. supply of gasoline and distillates – which include heating oil and diesel fuel – dropped last week.
Light sweet crude for January delivery rose $1.37 to settle at $60.17 a barrel Tuesday on the New York Mercantile Exchange. The last time crude settled above $60 was Nov. 9, when it finished at $61.16.
“The market is due for a bounce, and we’re getting some of that,” said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York. “Throw in the Alaskan news, and here we go.”
The Trans-Alaska Pipeline is flowing at 25 percent of its normal 800,000 barrel-a-day capacity, as strong winds disrupted tanker loading, the Alyeska Pipeline Service Co. said Tuesday. It’s not an unusual problem, but it’s one that doesn’t typically occur until later in the winter.
Also driving up prices were shutdowns at Exxon Mobil Corp.’s refinery in Baytown, Texas, the country’s biggest at 562,500 barrels a day, and Citgo’s 156,000 barrel-a-day refinery in Corpus Christi, Texas.
On Friday, the December crude contract had closed at $55.81 a barrel, the lowest settlement for crude since June 15, 2005.
Oil prices have fallen by about 23 percent since hitting an all-time trading high above $78 a barrel in mid-July. They haven’t settled above $62 a barrel since Oct. 1, despite the Organization of Petroleum Exporting Countries’ announcement in mid-October that it would reduce output by 1.2 million barrels a day.
Skepticism that OPEC members are committing to production cuts, as well as milder-than-normal U.S. temperatures this fall, have moderated prices.
In a recent interview with Nigeria’s This Day newspaper, OPEC President Edmund Daukoru acknowledged that some group members weren’t complying with the cuts, confirming market suspicions.
OPEC is scheduled to meet again in Nigeria on Dec. 14, and may announce further cuts.
In other Nymex trading, heating oil futures rose 6.23 cents to settle at $1.7331 a gallon, unleaded gasoline soared 7.84 cents to settle at $1.6327 a gallon, and natural gas futures slipped 3.1 cents to settle at $7.988 per 1,000 cubic feet.
January Brent at London’s ICE Futures exchange climbed $1.41 to settle at $60.39 a barrel.
Because the New York Mercantile Exchange will be closed Thursday and Friday for the Thanksgiving holiday, trading has been light this week. With fewer players in the market, price swings are often larger than they would normally be.