Oil traders eye $100 crude next year
NEW YORK (AP) - Oil prices headed toward a quiet end to a record-breaking year Monday - but were expected to resume their unprecedented advance early next year on a familiar mix of supply concerns.
Crude futures spent most of 2007 rising as demand from booming economies in Asia surged while American motorists continued to hit the road in record numbers, sending gas prices above $3 a gallon.
Oil, gasoline and heating oil supplies, meanwhile, lagged well behind levels that many analysts consider sufficient, sparking price rallies based on fears of an impending shortage. While no shortage has developed, concerns that demand for oil and petroleum products is outpacing supply have driven oil, gasoline and heating oil futures to record prices.
On Monday, light, sweet crude for February delivery rose 34 cents to $96.34 a barrel on the New York Mercantile Exchange on supply concerns raised by minor outages at refineries in Texas and California and Iran's plans to start up its first nuclear plant.
Trading was light, as it has been throughout the holidays, meaning the price move could be exaggerated. Still, analysts see little standing in the way of oil's ascent to $100 a barrel, or higher, once traders return from their holiday breaks. Oil prices peaked at $99.29 a barrel on Nov. 21 and are up 58 percent this year.
"I think there's a good chance this week that we'll see some record highs," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.
At the pump, meanwhile, gas prices rose 4.6 cents over the weekend to a national average of $3.046 a gallon, according to AAA and the Oil Price Information Service. Gas prices are following the lead of crude futures, which have risen 8.6 percent in December.
Gas and oil prices have reversed course in recent weeks after falling sharply in early December as oil inventories appeared to be growing, and several forecasters lowered demand growth predictions. But several weeks of falling inventories have combined with data suggesting demand remains strong to push oil futures back near record levels.
Oil prices have been helped along by Turkish attacks on Kurdish rebels in northern Iraq, which raised concerns that the rebels would retaliate by attacking an oil pipeline, and by the assassination of Pakistani opposition leader Benazir Bhutto, which sparked worries about general instability in the volatile but oil-rich Middle East.
Iran's announcement Monday that it will start its first nuclear plant next summer is an example of a development that, while not directly threatening oil supplies, brings the West's confrontation with the OPEC member sharply back to the fore.
"When you're in a low-volume holiday trade ... a headline like that ... is an item that will propel things," Ritterbusch said.
Minor outages at refineries in Texas and California, on the other hand, directly threaten supplies of heating oil and gasoline. In Monday trading, gasoline futures for January delivery rose 2.53 cents to $2.485 a gallon, while January heating oil futures rose 2.95 cents to $2.6665 a gallon. Both contracts have set new price records in recent weeks on supply concerns. Contributing to the increases was position-squaring ahead of both contracts' expiration later Monday, analysts said.
In other Nymex trading, February natural gas futures rose 1.7 cents to $7.403 per 1,000 cubic feet.
In London, February Brent crude rose 75 cents to $94.63 a barrel on the ICE Futures Exchange.
Crude futures spent most of 2007 rising as demand from booming economies in Asia surged while American motorists continued to hit the road in record numbers, sending gas prices above $3 a gallon.
Oil, gasoline and heating oil supplies, meanwhile, lagged well behind levels that many analysts consider sufficient, sparking price rallies based on fears of an impending shortage. While no shortage has developed, concerns that demand for oil and petroleum products is outpacing supply have driven oil, gasoline and heating oil futures to record prices.
On Monday, light, sweet crude for February delivery rose 34 cents to $96.34 a barrel on the New York Mercantile Exchange on supply concerns raised by minor outages at refineries in Texas and California and Iran's plans to start up its first nuclear plant.
Trading was light, as it has been throughout the holidays, meaning the price move could be exaggerated. Still, analysts see little standing in the way of oil's ascent to $100 a barrel, or higher, once traders return from their holiday breaks. Oil prices peaked at $99.29 a barrel on Nov. 21 and are up 58 percent this year.
"I think there's a good chance this week that we'll see some record highs," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.
At the pump, meanwhile, gas prices rose 4.6 cents over the weekend to a national average of $3.046 a gallon, according to AAA and the Oil Price Information Service. Gas prices are following the lead of crude futures, which have risen 8.6 percent in December.
Gas and oil prices have reversed course in recent weeks after falling sharply in early December as oil inventories appeared to be growing, and several forecasters lowered demand growth predictions. But several weeks of falling inventories have combined with data suggesting demand remains strong to push oil futures back near record levels.
Oil prices have been helped along by Turkish attacks on Kurdish rebels in northern Iraq, which raised concerns that the rebels would retaliate by attacking an oil pipeline, and by the assassination of Pakistani opposition leader Benazir Bhutto, which sparked worries about general instability in the volatile but oil-rich Middle East.
Iran's announcement Monday that it will start its first nuclear plant next summer is an example of a development that, while not directly threatening oil supplies, brings the West's confrontation with the OPEC member sharply back to the fore.
"When you're in a low-volume holiday trade ... a headline like that ... is an item that will propel things," Ritterbusch said.
Minor outages at refineries in Texas and California, on the other hand, directly threaten supplies of heating oil and gasoline. In Monday trading, gasoline futures for January delivery rose 2.53 cents to $2.485 a gallon, while January heating oil futures rose 2.95 cents to $2.6665 a gallon. Both contracts have set new price records in recent weeks on supply concerns. Contributing to the increases was position-squaring ahead of both contracts' expiration later Monday, analysts said.
In other Nymex trading, February natural gas futures rose 1.7 cents to $7.403 per 1,000 cubic feet.
In London, February Brent crude rose 75 cents to $94.63 a barrel on the ICE Futures Exchange.
