Oil prices settle at new high above $62 a barrel
(AP)
Updated: 2005-08-06 15:34

Crude oil prices settled at a new high above $62 a barrel on Friday, rallying on concerns about refinery snags and following the release of a positive U.S. jobs report.

The rally strengthened late in the session, as fresh news headlines and market rumors about trouble at several U.S. refineries added to worries about refiners ability to meet summer fuel demand.

Light, sweet crude for September delivery rose 93 cents to close at US$62.31 a barrel on the New York Mercantile Exchange.

"We continue to see a bunch of headlines on outages and failed restarts at refineries," a trader in the New York Mercantile Exchange gasoline pit told Dow Jones Newswires. "The refinery outages are spooking the gasoline market, and that's spilling over into the rest of the complex."

In earlier trading, the September crude contract jumped $1.07 to an intraday high of $62.45 a barrel, just 5 cents shy of the record hit on Wednesday.

A breach of the record high of $62.50 is a matter of time, said Chris McCormack, a technical analyst and broker at brokerage ABN Amro.

It could come "by Monday or Tuesday at the latest," he said, a move that could send the front month contract as high as $63.40-$65.30 "at a minimum.'

The September gasoline contract rose more than three cents to an intraday high of $1.8345 a gallon, closing on the record high of $1.86 a gallon reached last month.

September heating oil was up 2.52 cents at $1.7330 a gallon.

The number of refinery outages that have lifted gasoline futures more than 10 percent in past two weeks continued to grow. Among the latest, a mechanical failure Thursday reportedly forced Motiva to shut a cat cracker at its 115,000-barrels-a-day refinery in Norco, Louisiana.

The exact extent of the refinery troubles isn't known. But Barclays Capital estimates that the outages have cut at some 3 percent of U.S. refining capacity at a time when refiners should be running flat out to meet peak summer driving demand.

Phil Flynn, an analyst at Alaron Trading Corp. added that strong U.S. payrolls data released Friday is also bullish for prices because they "seem to suggest that consumers will be able to continue to use energy at a record pace."

The Labor Department reported Friday that U.S. nonfarm payrolls grew by 207,000 in July, the biggest increase in three months.