Oil Prices Approach $52 a Barrel
NEW YORK – Crude oil futures rose to near $52 a barrel Friday ahead of the U.S. Memorial Day holiday weekend, the start of the American summer driving season.
Light, sweet crude for July delivery on the New York Mercantile Exchange rose as high as $52 before settling at $51.85 a barrel, up 84 cents.
Heating oil prices fell 0.25 cent to $1.4458 a gallon while unleaded gas rose 2.75 cents to $1.4753 a gallon.
In London, Brent crude futures for July gained 54 cents to $50.70 a barrel.
“There’s continued mildly bullish sentiment as a result of this week’s statistics,” said Jamal Qureshi, markets analyst at PFC Energy in Washington, D.C.
On Wednesday, the U.S. Energy Information Administration’s latest petroleum data showed U.S. crude oil inventories fell 1.6 million barrels to 332.4 million barrels in the week ending May 20 from the previous week. Analysts were expecting a rise.
Also, Friday’s news that Saudi King Fahd was taken to a Riyadh hospital for medical tests pushed prices a bit higher.
Deborah White, an analyst with SG Securities in Paris, suggested that – with conflicting data affecting the market – major moves either way were considered “too risky at the moment.”
Markets currently expect the Organization of Petroleum Exporting Countries to maintain current output levels at its next meeting scheduled for mid-June, analysts said.
With the summer driving season kicking off this weekend in the U.S., demand is seen as outstripping production in this period.
“The Memorial Day weekend is fairly significant in the oil market,” said energy analyst Daniel Hynes of ANZ Bank in Melbourne, Australia. “Certainly, industry participants will be watching the demand of this period very closely.”
He said the focus for traders now will be on gasoline supplies, and whether aging U.S. refineries will be able to cope when production is ramped up to meet summer demand.
The American Automobile Association predicted last week a record 36.9 million Americans will travel 50 miles or more this Memorial Day weekend, with nearly 85 percent leaving home by motor vehicle.
Wednesday’s data showed gasoline inventories rose 600,000 barrels to 215.4 million barrels, up from 203.6 million a year ago. Most analysts had predicted a decline in gasoline stocks.
Despite the past week’s drop in crude stocks, Hynes said an overall bearish market sentiment prevails because of long-term builds in crude stocks, which are currently 32.4 million barrels higher than year-ago levels. The decline reported Wednesday was only the second in 15 weeks.
Crude prices are about $7 lower than their all-time high of $58.28 set April 4.
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Associated Press Writers Edith Balazs in Budapest, Hungary, and Sui-Lee Wee in Singapore contributed to this report.