Marginal increase in oil prices as they hover around US$72 a barrel

28-Jun-06

Oil prices rose slightly on Tuesday, but continue to linger around US$72. Light sweet crude for August delivery rose to US$71.92 a barrel on the New York Mercantile Exchange. Brent crude futures on the ICE Futures exchange rose to US$71.27 a barrel. The cause of this spike is a focus on a plethora of factors including shipping delays along the Gulf Coast, rejection by Iran's supreme leader of the need for nuclear talks with the United States and rising demand from China. The Calcasieu Ship Channel remains closed due to the spread of oil from a spill last week at the Citgo Petroleum Corp. facility in Lake Charles. 8 ships carrying crude oil are waiting to enter the channel. As a result, 4 refineries in the Lake Charles area that account for 3% of the nation's refining have reduced runs. Recent figures show that crude futures in China are currently trading about 19% higher than a year ago. The rapid increase in car sales in China to 24.1% from a year ago levels has also contributed to the rise in gasoline demand coupled by the peak summer demand.