Concerns over global crude oil supplies energized the commodities market Friday, sending prices higher at the New York Mercantile Exchange.
Light sweet crude oil rose 56 cents to $62.37 a barrel. Reformulated gasoline edged up 2 cents to $2.35 a gallon. Heating oil finished 2 cents higher at $1.88 a gallon, and natural gas climbed 18 cents to $7.90 per million British thermal units.
In a monthly report on oil supplies, the International Energy Agency questioned whether worldwide global crude stores are sufficient to feed demand, especially going into this summer's driving season in the U.S.
"According to the IEA numbers, current OPEC production levels might be as much as 1.3
million barrels per day short of that actually required to keep the market in balance over the course of the year," analysts at Barclays Capital wrote in a research report.
Violence in Nigeria's oil-producing delta region is also damaging supplies. As much as 850,000 barrels a day, worth one-quarter of Nigeria's production capacity, may be shut in because of the violence, according to Dennis Gartman, publisher of
The Gartman Letter
These new worries are adding to existing strains on U.S. energy supplies caused by prolonged refinery problems. Refinery utilization for the week ended May 4 was 89%, according to the Energy Information Administration. Refinery utilization is usually well above 90% at this time of year and is running below the 10-year average.
When refinery utilization is low, refiners buy less raw crude oil for the manufacture of petroleum products like motor gasoline, which can induce a near-term glut of crude in storage and tighter supplies of refined products.
The effects of low refinery utilization are clearly visible in today's futures markets. The near-term crude contract has fallen more than 7% in the last month, while gasoline futures have soared more than 10%. Motor gasoline inventories are "well below the lower end of the average range," according to the EIA.
However, oversupplies caused by low refinery utilization numbers can be misleading because they tend to be short-lived. As refiners bring more equipment online after their annual spring maintenance, they will buy more crude oil to build their summer-formula gasoline inventories. In this scenario crude supplies can quickly tighten, pushing prices upward.
Meanwhile, energy stocks rode the coattails of advancing commodity prices in the latest trading session. The
CBOE Oil Index
gained 1.6% to 692.32.
jumped 1.6% to $70.16.
climbed 1.7% to $79.52 and
surged 1.8% to $80.85.
Italian oil giant
reported an adjusted profit of 2.7 billion euros in the first quarter of 2007, compared with 3.0 billion euros during the same period a year ago. Eni earned $1.91 per American depositary receipt, meeting analyst estimates, according to a survey by Thomson Financial.
Eni's revenue fell 7% from a year earlier to 21.9 billion euros.
was upgraded by RBC Capital Markets to outperform from sector perform, and its stock climbed 1.4% to $40.28.
( SUG) was upgraded by J.P. Morgan to overweight from neutral, lifting its shares 3.8% to $32.23.
was downgraded by Canaccord Adams to hold from buy, but its shares managed a small advance to $61.28.
Ferris Baker Watts cut
ATP Oil & Gas
( ATPG) to neutral from buy, but its shares still tacked on 1% to $43.77.
Canadian Natural Resources
was downgraded by RBC Capital Markets to sector perform from outperform. Its stock moved 1.9% higher to $63.45.