Oil Prices Soar Above $67 Per Barrel Wednesday August 24, 2:39 pm ET By George Jahn, Associated Press Writer Crude Oil Prices Rise to New High Above $67 a Barrel on Worries About Storm Near Gulf of Mexico Oil prices rose to a new high above $67 a barrel Wednesday on concerns about a storm that could enter the Gulf of Mexico later this week and a U.S. government report that showed a decline in domestic gasoline inventories.The storm fears also triggered a rally in natural gas futures. Crude oil for October delivery rose $1.44 to $67.15 a barrel in afternoon trade on the New York Mercantile Exchange. That tops the previous intraday high of $67.10 hit on Aug. 12. On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago. September natural gas futures climbed 16.7 cents to $9.850 per 1,000 cubic feet. The contract had surged as high as $10.128 per 1,000 cubic feet in overnight electronic trade. Brokers said supplies of oil, natural gas, gasoline and other products are adequate for this time of year, explaining that the seemingly unending rally on energy markets is more a reflection of fears about unexpected supply disruptions at a time when demand is strong. "A lot of this is 'just in case' buying," said oil broker Mike Fitzpatrick at Fimat USA in New York. The amount of natural gas in storage in the U.S. stands at 2.52 trillion cubic feet, according to the Energy Department. That is about two-tenths of a percent below year ago levels. "I don't see a big problem," Fitzpatrick said. In its weekly petroleum supply report, the Energy Department said domestic inventories of gasoline fell by 3.2 million barrels last week to 194.9 million barrels, or 7 percent below year ago levels. U.S. supplies of crude oil grew by 1.8 million barrels to 322.9 million barrels, or 13 percent above year ago levels, the agency said. The supply of distillate fuel, which includes heating oil and diesel, increased by 1.4 million barrels to 132.5 million barrels, or 4 percent above last year's level. The mixed picture did little to calm nerves on energy markets. "The inventories have built a little bit, but that doesn't mean an outage somewhere doesn't cause price spikes," said oil broker Tom Bentz at BNP Paribas Commodity Futures in New York. On London's International Petroleum Exchange, October Brent crude futures rose 18 cents to $64.83 a barrel. Nymex heating oil gained 1.56 cents to $1.835 a gallon while gasoline rose nearly 1.7 cents to $1.875 a gallon. With the summer driving season drawing to an end, market focus is expected to shift to heating oil as demand for this product usually peaks in the winter. Stoking bullish sentiment was Tropical Storm Katrina, which formed Wednesday morning in the Bahamas and could reach hurricane strength before hitting the coast of Florida later this week. The National Hurricane Center said the storm is expected to cross the state and head into the Gulf of Mexico, dropping a foot or more of rain. Oil companies have shut down facilities in the Gulf as precaution against storm damage. Ken Hasegawa, commodities broker at Tokyo-based Himawari CX, said "the emergence of the new storm is supporting gains." But other analysts said the storm worries may be overblown. "As with most storms, we think the fear factor is exceeding the likely impact on production here," said Timothy Evans, senior energy analyst at IFR Energy Services in New York. The market has also been rattled lately by production outages in Ecuador, due to worker unrest, and in Iraq, where insurgents shut down most of the country's electricity grid on Monday. "The markets are focused on event risk, and the fact that any small disruption in production, due to the thinness of refinery capacity, could lead to a short-term hiccup," said Joe Duarte, a Dallas-based independent energy analyst. "The market is clearly in a different zone now, being driven by momentum more than fundamentals." Iraqi exports have since begun returning to normal, and the situation in Ecuador also has stabilized. Associated Press Writers Brad Foss in Washington and En-Lai Yeoh contributed to this report from Singapore.
If my wave count is right, in 20 days from today crude shall hit $77ish on its wave 5 target up. It hit wave 3 at $67.13 on 8/12 (theoretical target was $66.97). It will not be straight line up there, or maybe it will ...