Oil Rises to a Record on Speculation OPEC May Not Meet Demand
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a12PHbVZUaOs&refer=home
April 4 (Bloomberg) -- Crude oil futures in New York rose to a record on speculation oil producers may fail to raise output fast enough to meet rising demand.
OPEC, which pumps about 40 percent of the world's oil, will this week discuss whether the group can supply more after a promise in March to increase production failed to bring prices down, President Sheikh Ahmad Fahd al-Sabah said April 2. Traders say the group, which is pumping near capacity, may be unable to relieve concerns of a shortage.
``The market's in a very bullish mode,'' said Pieter Bruinstroop, who helps oversee $2.3 billion in resource company investments for APS Asset Management Ltd. in Singapore. ``Demand does not seem to be impacted'' by higher prices. ``It's production that counts,'' he said.
Crude oil for May delivery rose as much as 52 cents to $57.79 a barrel in after-hours electronic trading on the New York Mercantile Exchange, beating an April 1 intra-day record of $57.70 a barrel. Oil traded at $57.55 a barrel at 11:50 a.m.
OPEC may strain to supply the 30.3 million barrels that may be needed by the end of the year, al-Sabah said March 16.
The group pledged to add half a million barrels a day more as early as May if prices rose and demand warranted more supply. It deferred talks on the second increase on March 29 after oil fell below $55. May oil futures jumped more than $3 a barrel last week.
U.S. refineries have run at 91.2 percent of their capacity this year, up from 89.2 percent for the same period a year ago, according to Energy Department data. U.S. gasoline demand usually peaks after the Memorial Day holiday late May.
Gasoline Supply
``Gasoline really is the driver,'' Daniel Hynes, a natural resources analyst at Australia & New Zealand Banking Group Ltd. in Melbourne, said before the start of trading. ``Capacity utilization is relatively high and gasoline stocks, while not that low, could be a bit higher.''
U.S. gasoline supplies fell 2.9 million barrels to 214.4 million barrels in the week ended March 25, according to the department. The bigger-than-expected decline was the fourth straight fall. Supplies that week were 7.4 percent higher than a year earlier.
U.S. gasoline consumption averaged 8.9 million barrels a day this year, up 2.2 percent from the same period in 2004, Energy Department data shows.
Survey
The average oil price in the three months ending June 30 may fall for the first time in eight quarters as U.S. inventories rise and China's demand growth slows, a Bloomberg survey showed.
Oil futures in New York may average $49.50 a barrel in the second quarter, down from $50.03 in the first, according to the median of 25 analysts' forecasts.
China, whose soaring demand helped push prices to records, cut imports 13 percent in the first two months of this year, prompting speculation its growth may be slowing. U.S. inventories last week rose for a seventh week to their highest since July 12, 2002, reducing concern about shortages.
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