LONDON, AP – Oil prices gained Friday as market participants worried by the approach of the summer driving and Atlantic hurricane seasons purchased oil contracts ahead of a long weekend in the United States.
Light, sweet crude for July delivery rose 26 cents to $71.58 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. July Brent crude at London’s ICE Futures exchange rose 39 cents to $71.10 a barrel.
The market in New York closes early Friday and will be shut Monday in observance of Memorial Day in the United States, the unofficial start of the summer driving season, when gasoline demand peaks.
Market participants said the prospect of an active hurricane season — which starts June 1 — is another factor pushing crude oil prices up.
Last year’s hurricane season damaged key oil infrastructure in the U.S. Gulf of Mexico, including Hurricane Katrina’s severe disruption of the flow of oil and natural gas from the region, and the shutdown of onshore refineries and pipelines.
Gasoline futures, which led the previous session’s rally on news of refinery snags, gained less than half a cent Friday to $2.1080 a gallon while heating oil prices rose more than half a cent to $2.0004 a gallon.
Worries about summer supply shortages were reignited by reports of refinery snags, offsetting U.S. government data that showed gasoline inventories rose for a fourth consecutive week.
Pasadena Refining Systems briefly shut a key gasoline-producing unit at its 100,000 barrel-a-day Pasadena, Texas, refinery following an operational error Wednesday, according to a state environmental report.
Also, Murphy Oil Corp.’s Meraux, La., refinery, shuttered since Hurricane Katrina, may not return to normal operations until the end of June — a month later than expected, according to a report published by JP Morgan late Wednesday.
Natural gas prices were steady at $5.976 per 1,000 cubic feet despite data released by the U.S. Energy Department showing domestic natural gas inventories swelling by 83 billion cubic feet in the past week to 2.16 trillion cubic feet, or 50 percent above the five-year average for this time of year.
Natural gas futures are near a one-year low and some analysts say that if inventories continue to grow at this pace, the country could run out of natural-gas storage capacity before winter, a prospect which should exert downward pressure on prices.