Crude oil prices bounced back Tuesday, closing above $40 a barrel for the first time in almost 14 years, despite Saudi Arabia's recent call for OPEC to increase production to avoid any negative impact on global economic growth.
The benchmark U.S crude for June delivery gained $1.22, or 3.1%, to close at $40.15 a barrel, eclipsing the recent high set last Friday and the highest close since October 1990 after Iraq had invaded and occupied Kuwait.
The latest leg of the spring rally follows a modest selloff Monday after Saudi Arabian Oil Minister Ali al-Naimi said OPEC should raise its production target by at least 1.5 million barrels per day, a bit more than 6%, from its current production rate of 23.5 million, when the organization of the world's largest oil producers meets on June 3.
Prices jumped again Tuesday as traders continued to worry about gasoline supplies ahead of the summer driving season. Gasoline futures rose about 2 cents, or 2.1%, to $132.3 a gallon on the New York Mercantile Exchange, less than a penny shy of Friday's high. Wholesale prices have climbed sharply since April 21, when they were at $1.13 a gallon.
Crude prices repeatedly closed near 14-year highs last week on continuing Middle East security concerns, worries over gasoline shortages and a Department of Energy report that said U.S. crude inventories were lower than expected. The government will release its weekly inventory figures later this week.