SINGAPORE, AP -Oil prices rose above $72 a barrel Tuesday as the suspension of refinery productions along the U.S. Gulf Coast due to a shipping snag reignited concerns that gasoline supplies would not be able to meet demand during the summer driving season.
Also, rising demand from China — Asia’s largest consumer of fuels — and worries about the ongoing tension between Iran and the West have lifted oil prices in recent weeks, with crude futures now trading about 19 percent higher than a year ago.
Light, sweet crude for August delivery rose 22 cents to $72.02 a barrel in electronic trading on the New York Mercantile Exchange. Gasoline futures were unchanged at $2.1845 a gallon, after gaining more than 5 cents to finish at $2.1788 per gallon Monday night.
In London, Brent crude futures on the ICE Futures exchange climbed 30 cents to $71.03 a barrel.
Prices for refined products such as gasoline is driving the market, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
“Crude oil derives all of its values from product prices,” Shum said. “When product prices increase, there’s a knock-on effect on crude.”
Moreover, Wednesday’s weekly snapshot of U.S. petroleum supplies might show a fall in gasoline stocks as demand picks up ahead of the July Fourth holiday, when Americans typically travel, Shum said.
The U.S. Coast Guard said Sunday that only limited tug and barge traffic had resumed through the Calcasieu Ship Channel, which had been off limits due to the spread of oil from a spill last week at the Citgo Petroleum Corp. facility in Lake Charles, Louisiana. The closure, which has lasted for six straight days, has forced at least four refineries on the Gulf Coast to reduce runs.
Recent Chinese customs data showed the country’s oil demand growth accelerated to 13.5 percent in May, as refiners boosted output and curbed exports ahead of a domestic price increase to meet peak summer demand. The rapid increase in car sales in China — to 24.1 percent in May from a year earlier — have also contributed to the rise in gasoline demand, Shum said.
On the Iran front, President Mahmoud Ahmadinejad on Monday shrugged off increased international pressure over his nation’s disputed nuclear program, saying it would not cause his country any harm.
Washington has warned Iran that it could face political and economic sanctions before the U.N. Security Council if it doesn’t stop its nuclear activities, which the United States and its European allies say is an attempt to produce nuclear weapons. Tehran says the uranium will be used only for a peaceful energy program.
Oil traders are watching how the developments might affect Iran’s oil exports.
Ahmadinejad has said Tehran is studying a list of Western incentives for Iran to stop its program, and said he will reply by mid-August. European and U.S. officials have called for an answer in mid-July.
In other Nymex trading, heating oil prices rose slightly to $1.9825 a gallon, while natural gas futures climbed 7.6 cents to $6.045 per 1,000 cubic feet.