March 24, 2005
By George Jahn Associated Press Writer
AP
VIENNA, Austria (AP) - Crude futures rose Thursday, as concerns about an explosion at America's third-largest oil refinery overrode the bearish pull of U.S. figures showing a huge increase in crude inventories.
Light, sweet crude for May delivery was up 11 cents to $53.92 a barrel by late morning in Europe in electronic trading on the New York Mercantile Exchange. The benchmark commodity had dropped $2.22 on Wednesday after the inventory data was released but before the explosion.
Heating oil rose less half a cent to $1.5390 a gallon.
Brent crude, meanwhile, was up 24 cents to $53.28 a barrel on the International Petroleum Exchange.
Crude oil rose in after-hours electronic trading Wednesday following an explosion at a BP crude oil refinery in Texas, the third-largest in the United States, which left at least 14 people dead and more than 100 people injured.
The refinery produces 30 percent of BP PLC's North American supply of petroleum products, and 3 percent of the U.S. supply. It processes about 430,000 barrels of crude oil a day. Unleaded gasoline for April delivery was up 1.11 cent to US$1.5860 by late morning in Europe in electronic trading on the Nymex.
"The explosion ... is viewed as a problem," said Deutsche Bank analyst Adam Sieminski in London.
He also suggested that despite the inventory builds shown in the U.S. Energy Department weekly report Wednesday, strong demand from China and other growing economies would probably keep prices high over the medium term.
While new figures show lesser Chinese hunger for energy, "demand is still rising and that's what's got people worried," he said.
Oil futures on the Nymex are down nearly $4 a barrel since their intraday high of $57.60 set last Thursday.
Analyst Phil Flynn at Alaron Trading Corp. described the recent drop from all-time highs as a "correction of a market that was ahead of itself."
"The bulls are still waiting," he said.
Oil is roughly 45 percent more expensive than a year ago but still well below the inflation-adjusted peak above $90 a barrel set in 1980.
Bringing at least temporary relief, the U.S. report said that crude oil inventories rose by 4.1 million barrels last week to 309.3 million barrels, or 8 percent above year-ago levels.
The strengthening dollar has also eased the crude market in recent days, as a rise in the dollar - the currency of international oil trading - will spur funds to switch money from commodities such as energy and metals into foreign exchange markets.
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