Source AP ©

Oil prices rise above USD 65 a barrel

Oil prices climbed above US$65 a barrel in Asian trading Monday on continued concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

Light, sweet crude for June delivery gained 26 cents to US$65.20 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore.

The contract rose 8 cents to settle at US$64.94 Friday after jumping US$2.31 in the previous session.

With the Northern Hemisphere's summer driving season set to begin in just over a week, energy traders have been concerned that gasoline supplies won't meet demand, and a string of planned or unexpected refinery shutdowns have fueled such worries.

"It will continue to be an issue. If demand is strong this season, it's going to be hard to keep up and it will push prices," said Tobin Gorey, a commodity strategist with Commonwealth Bank of Australia in Sydney.

The U.S. Energy Information Administration reported Wednesday that gasoline stocks, while increasing to 195.2 million barrels last week, remained well below the average for this time of year.

Oil prices were also supported by the political situation in Nigeria, a major oil producer.

Nigerian labor leaders on Thursday called a two-day strike on May 28 to protest last month's elections. The strike is scheduled to coincide with the inauguration of a new government. The unions argue that the April elections which gave a sweeping victory to President-elect Umaru Yar'Adua and the ruling People's Democratic Party were fraudulent and unacceptable.

But Gorey said the market did not expect the planned strike to have a significant impact on crude futures.

"We're not very sure how long it will last," he said. "It's not an issue that is necessarily having too much influence on the market now."

In other Nymex trading, heating oil futures gained 0.84 cent to US$1.9236 a gallon (3.8 liters) while natural gas prices lost 1.7 cents to US$7.927 per 1,000 cubic feet.

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