Oil rises on concerns about future supplies

AP News
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Posted: Jun 09, 2011 3:43 PM
Oil rises on concerns about future supplies

Oil climbed above $101 per barrel Thursday as investors focused on how the world would meet energy demand in coming months.

Benchmark West Texas Intermediate crude for July delivery rose $1.19 to settle at $101.93 on the New York Mercantile Exchange.

World oil demand is expected to outpace supplies later this year by the widest margin since 2007. While OPEC has decided not to officially increase oil production, Saudi Arabia and a few other oil-producing nations are expected to boost exports anyway. Analysts aren't sure if it will be enough to meet demand.

"You see this general nervousness" in the U.S. and Europe, Houston oil analyst Andrew Lipow said. U.S. lawmakers and the International Energy Agency have talked about meeting future demand by tapping emergency supplies. But that will do little to ease the growing energy appetites of China and other emerging economies.

"Prices are going to go up, that's what's going to happen," Lipow said.

Meanwhile, U.S. gasoline pump prices fell 1.4 cents Thursday to $3.734 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 21.7 cents cheaper than it was a month ago, but it's still $1.021 higher than the same time last year.

Average gas prices remain above the $4 per gallon mark in Connecticut, Illinois, Michigan, Alaska and Hawaii.

Natural gas futures lost 17.3 cents, or 3.6 percent, to settle at $4.674 per 1,000 cubic feet after the government said supplies in storage grew last week more than analysts expected. The Energy Information Administration said supplies increased by 80 billion cubic feet last week to 2.187 trillion cubic feet.

In other Nymex trading for July contracts, heating oil added 4.41 cents to settle at $3.1378 per gallon and gasoline futures gained 6.11 cents to settle at $3.0398 per gallon.

In London, Brent crude rose $1.72 to settle at $119.57 per barrel on the ICE Futures exchange.

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Chris Kahn can be reached at http://www.twitter.com/ChrisKahnAP