June 19, 2005
Oil prices on their way back up:
WSJ.com - Crude Prices Hit Record Highs On Fears of Low Gas Supplies: 'This market is being driven by fear of supply shortages in the future, and fear of increased demand outstripping supply in the fourth quarter,' said Anthony Lerner, manager of energy derivatives for Arc Oil LLC, a Stamford, Conn., brokerage firm. Hedge funds led buying in crude and refined products, traders said, with many betting oil prices would keep climbing toward $60 a barrel. 'This is really being driven by hedge-fund money,' Mr. Lerner said. 'We're seeing new hedge-fund money coming in every day. Energy is the hot market and hedge funds are allocating money for it.'
Benchmark light, sweet crude oil prices for July settled at $58.47 a barrel, up $1.89 on the New York Mercantile Exchange, topping the April 1 record-high settlement of $57.27 a barrel. At its intraday high, crude touched $58.60, also beating the all-time record high. Crude's back months traded at a hefty premium to July, with the December contract hitting the highest price ever registered for a Nymex oil contract at $60.40 a barrel.... Oil prices have gained nearly $5 a barrel this week, buttressed by rising gasoline and heating-oil prices. U.S. gasoline inventories, while adequate, have fallen in the past two weeks, while distillate stocks, which include heating oil and diesel fuel, remain at below-average levels.
Posted by DeLong at June 19, 2005 10:34 PM