Price of crude oil hits new high
By Mark Shenk
Bloomberg News Service
Crude oil rose to an all-time high in New York as surging gasoline demand raised concern that refinery capacity and fuel supplies will be inadequate in the months ahead.
Record U.S. gasoline consumption has sent prices of gasoline at the pumps soaring before demand reaches its annual peak during the summer.
Oil prices are up 27 percent this year partly on concern that terrorists may try to cripple exports from the Middle East, where about a third of world supply is pumped.
"We just don't have the capacity to make enough gasoline," said Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York. "There is a big fear premium in the crude-oil price because so much of it is in an insecure part of the world."
Crude oil for June delivery rose 30 cents, or 0.7 percent, to settle at $41.38 a barrel on the New York Mercantile Exchange. Oil gained 3.6 percent this week.
The futures, which rose to their third straight record closing price, reached an all-time high of $41.56 a barrel during the session, surpassing the previous intraday record of $41.15 set in October of 1990, when Iraqi troops were occupying Kuwait.
This year's rally in oil "is also due to the fallout of a war situation," said George Gaspar, an energy analyst with Robert W. Baird & Co. in Milwaukee. "The terrorist threat has raised the vulnerability of Middle East supply to an all-time high."
Gasoline for June delivery rose 0.96 cent to $1.4101 a gallon in New York, the highest closing price in the 20 years the contract has traded.
Retail gasoline has followed futures higher. Pump prices for regular gasoline, averaged nationwide, rose 0.3 cent to a record $1.953 a gallon yesterday, according to AAA travel club.
Local gasoline prices continued to climb as well yesterday, pushing the average price for regular to a record $2.139 in Honolulu.
The Hawai'i statewide average for regular dipped to $2.223 from yesterday's record $2.224 a gallon, according to AAA. California led the nation with an average of $2.271 a gallon.
In Wailuku, the average fell less than a penny to $2.449, while in Hilo, the average for regular was unchanged at $2.279 a gallon.
